Ross McKnight

Globally, markets look expensive across equities and fixed income, with few pockets of value apparent. However, with markets awash with liquidity (via fiscal and monetary easing) and economies performing pretty well, this is partly justified. For this reason, we remain cautiously optimistic for stock markets in the short term. We believe the next period of positive equity market returns (if indeed there is one) will be driven by earnings growth rather than P/E multiple expansion. We continue to prefer markets with valuation support and lower expectations priced in. Europe is a good example of this, as is Emerging Markets and, to a lesser extent, the UK. Within fixed income, we continue to favour high quality short dated fixed income as protection in portfolios but are considering adding some longer rates exposure in the UK in the weeks ahead.

‍

‍