Tactical Asset Allocation: December update

December 2024 update

While US election results seemingly represented a sudden change to the market cycle, we’re skeptical of this interpretation and look at the experience from 2016 to draw valuable lessons. Markets promptly absorb new information, and eventually return to focusing on traditional drivers of performance such as monetary policy, the growth cycle, and inflation.

Our framework remains in a contraction regime, and there are no changes to our portfolio positioning. We’re still overweighting bonds versus stocks. We’re favoring US stocks, and defensive sectors with quality and low volatility characteristics. In fixed income, we remain overweight duration and underweight credit risk.

Get the full story

See what our macro regime framework is telling us — and what we’re doing in response — in our December 2024 Tactical Asset Allocation update.

Topics include:

• Macro update — Global growth remains broadly stable around the world. Our macro framework remains in a contraction regime, signaling below-trend growth and decelerating growth expectations.
• Markets — The US election outcome was the dominant driver of financial markets the past month. Two main themes are being priced across asset classes ­— a positive US growth shock with expectations of expansionary fiscal policies, and a negative growth shock for the rest of the world with expectations for higher tariffs and global trade policy uncertainty.
• Investment positioning — See what we’re favoring in stock, bond, and currency markets.