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GWS Equity Insights


/ 12 Abr 2019

In Central Banks We Trust

The two questions we receive most often are: 1) Why are global equities continuing to rally despite disappointing economic data, and 2) Why are earnings being revised down in every region we follow? Those who are bearish point to the action in the bond market where the recent drop in yields and inversions in parts of the US Treasury curve suggest that the dovish pivot is too little, too late. In our view, the equity markets are looking through the current soft patch and have faith that the dovish reversal from global central banks as well as Chinese stimulus will halt the slide in growth and reverse the deterioration in earnings expectations. This current period could be somewhat like 1994 or 1998 where the Fed provided mini-easing cycles in the midst of the longer-term tightening period due to volatility that came from outside the US.

MCC - Columna Diego Torres (El Mercurio Inversiones)


/ 21 Mar 2019

Venezuela y PDVSA: el precio del cambio

El potencial cambio de régimen en Venezuela ha puesto al país en la mira de la comunidad internacional. Un sinnúmero de Estados han reconocido al presidente encargado, Juan Guaidó. Se han realizado manifestaciones de todo tipo en pro del cambio, e incluso el nuevo presidente sigue desafiando a Nicolás Maduro al haber regresado a Venezuela pese a existir una prohibición de salida, arriesgando prisión por ello.

GWS Equity Insights


/ 11 Mar 2019

Climbing a Wall of Worry

After the incredibly strong start to the year for global equity markets, it’s important to consider the conditions that led to the fourth quarter 2018 volatility and where those indicators are today. In early October, US Vice President Mike Pence gave a speech that indicated a protracted cold war between the US and China; the Fed suggested that several rate hikes would be coming as they were “a long way from neutral” and that shrinking their balance sheet was on auto pilot; the 10 year treasury yield was 3.2%; West Texas Intermediate Crude (WTI) was above $75 per barrel; 2019 S&P 500 earnings were expected to be nearly $180; and the forward P/E multiple was 16.8x.

GWS Equity Insights


/ 8 Feb 2019

Underweight European Equities

After the dismal December for equity markets, January brought relief with the MSCI All Country World recovering 7.9%. While many macro concerns remain – a slowing China, Brexit, an Italian recession and noise from Washington – one major headwind was removed: tighter US monetary policy. During January, the Fed shifted its policy stance from tightening to one of patience and flexibility. We view the risk / reward in the S&P 500 as roughly balanced and maintain our recommendation to maintain a neutral strategic weight. Consensus earnings estimates for 2019 have been reduced to levels that are consistent with ours and valuation have come down.