We favor US stocks. We are underweight Europeans and Asians.
The most defensive sectors can benefit from a late macro cycle, even recessive:
Long term opportunities:
We see less travel than last month, but there is still value. We have seen 25 bps declines in US rates, we favor Corporate USD.
The dollar is in the range of 1.03-1.08 due to a more predictable monetary policy than the euro and the war in Ukraine. The currency market discounts a worse outlook for the euro zone. It could have gone all the way to parity.
We see it as risky to invest in Energy at these levels, but we discount that high prices will remain at these levels in the short term due to the war in Ukraine.
Inflation and supply problems favor the agri-food sector. We see medium-term growth for these Soft Commodities.