Top Down: Reducing Consumer Discretionary to Neutral

14 September 2022

Every month, our Asset Allocation Committee meets to discuss and debate our market outlook. How has our asset allocation changed month-on-month? Here Sebastian Orsi CFA, Senior Research Analyst, presents our views.

Global equities declined 2.2% in euro terms in August, although they are still well above the recent lows, while euro area bonds declined 4.9%. Some familiar factors were behind the declines: expectations for tighter monetary policy, European energy security, and China’s renewed Covid restrictions.

Europe was the centre of weakness as euro area bond yields had a record monthly increase, despite rising recession fears. As the flow of natural gas through Nord Stream 1 was halted indefinitely, renewed European energy security fears drove a month-end equity sell off, although sovereign bond yields did fall slightly then (prices rose). 

Meanwhile, consensus global economic forecasts were cut again, while inflation expectations rose. 

How has this impacted our asset allocation? And what is our market outlook? 

To find out, read our latest edition of  Top Down.


Previous editions of Top Down

Explore some of our previous editions of Top Down to see how our asset allocation views have changed this year.  


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