A narrow rally
Inflationary pressures appear to have peaked. Bond markets are already discounting lower interest rates in the US by the end of the year. We suggest that this is only likely in the event of a recession, which isn’t being discounted by equity markets.
There are growing indicators of slowing economic growth with the US labour market showing signs of creaking.
Given the backdrop of challenging interest rates and declines in earnings expectations the outlook remains a challenge for optimistic risk takers.
Whilst there are a mix of signals from competing asset classes, we are looking into 2023 for clues to become more positive.
A key indicator will be a trough in profit margins. That still feels to be distant. High quality assets may prove key to withstanding equity market volatility.
All expressions of opinion reflect the judgment of Artorius at 21st April 2023 and are subject to change, without notice. Information has been obtained from sources considered reliable, but we do not guarantee that the foregoing report is accurate or complete; we do not accept any liability for any errors or omissions, nor for any actions taken based on its content. The value of an investment and the income from it could go down as well as up. The return at the end of the investment period is not guaranteed and you may get back less than you originally invested. Past performance is not a reliable indicator of future results. Nothing in this document is intended to be, or should be construed as, regulated advice. Artorius provides this document in good faith and for information purposes only. Reliance should not be placed on the information contained within this document when taking individual investments or strategic decisions. Artorius Wealth Management Limited is authorised and regulated by the Financial Conduct Authority. Artorius is a trading name of Artorius Wealth Management Limited.