Global Perspective on the Stock/Bond Ratio
As I shared with clients earlier this week, there’s a highly important distinction to make when it comes to the moves in the stock/bond ratio —this is a US thing.
If you look at global markets, the trend we see in emerging markets and developed markets ex-US is that the stock/bond ratio is actually moving higher. Europe and China are stimulating their economies and turning up out of slowdown, things are really changing in Japan, and even LatAm is looking good —much of the world’s stockmarkets are going up and enjoying a weaker USD and rotation flows out of US into global markets.
Not only does this help frame what is going on in the US with the turn in the stock/bond ratio, but it also hammers on the global vs US rotation theme. As alluded to above I think we are early on both of these major asset allocation themes.
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