In case you missed it, Manulife Investment Management published their most recent Three-minute macro report, this time focusing on the United States debt ceiling, credit activity and European equities, which the firm says have been good to investors over the past six months, but which are now beginning to lose their shine.
They say, globally, significant uncertainties reduce visibility and make it difficult to have high conviction, but they say caution and a focus on long-term investing opportunities remain the right approach in the current uncertain economic environment.
The report goes on to look at key themes, including rolling uncertainty shocks, with the timing and outcome of several events being almost unknowable, and increased politicization of the macroeconomic environment. “Numbers we can quantify but people are harder to predict,” they write. “Growing geo and domestic political risks mean an increased reliance on scenario analysis as opposed to standard quantitative analysis.”
Finally, they discuss persistent U.S. fiscal headwinds, saying the firm’s view is that a near-term U.S. recession is likely, along with ongoing weak growth in the U.S. beyond that. As for Europe, an outperformer in recent months, they say there is trouble seeing the region as a continued macroeconomic trade winner going forward.
