Global Investment Strategy

GIS April 11 (My Cost is Your Income)

Date: 2016-04-10 - Prepared by: The GISI

In this issue we argue that (a) recently stock markets have been positively correlated with rising bond yields and hence are not worried about slightly higher interest rates in the U.S.; (b) the short end of the U.S. bond market should soon reprice its expectations of the Fed Funds Target Rate because wage pressures in America are intensifying; and (c) the US$ should soon resume its uptrend against most currencies despite America’s rapidly rising Net Foreign Debt (a.k.a. Net International Investment Position). Our suggested Global Asset Allocation Table, on page 5, favours the Utilities sector in North America, Banks in certain emerging economies as well as in Canada and a few other asset classes.

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