Asset Allocation: Earnings winter is coming

  • As the economy cools, earnings will slow more than consensus expect
  • EPS growth may not go sub-zero, but 5% seems more likely than 10-15%
  • At 5% EPS growth, S&P 500 trades at 17x earnings (long-term average)
  • But Fed pause, QT taper means further sharp de-rating is unlikely
  • US, China policy responses suggests data should improve in H2
  • In the near term, however, negative surprises are likely to continue
  • We cut our equity exposure by 4% to a 3% overweight (all in DMs)
  • EM equities go to neutral, as we further rotate into EM bonds instead
  • We reduce duration some more shifting 7% from DM bonds to cash

Economics

Politics

Markets

VIDEO

Video

View our summary videos on fast trending topics. To listen to a recording of our Conference Calls, please get in touch with zdl@tslombard.com

READ MORE
TRACK RECORD

Track Record

We have a 29 year track record of successful calls. Many of these calls combined economic, political and market analysis.

READ MORE
PRESS

Press

To request an interview with a member of our team, please get in touch zdl@tslombard.com .

READ MORE

Menu

Client Login


Don't have an account? CREATE YOUR ACCOUNT
READ MEET TALK