U.S. Economic growth has proven resilient despite higher levels of inflation. At the same time, stronger-than-expected corporate earnings have helped propel markets to new highs, even as investors contend with geopolitical uncertainty, higher energy prices, and elevated interest rates.
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Hear directly from the Office of the CIO on updated views, key trends, and strategies to help navigate the second half of the year.
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Key Takeaways from our Mid-Year Outlook
- The economy remains resilient, although leadership is becoming narrower and more selective.
- Business investment, artificial intelligence, and higher-income consumers are carrying an increasing share of the growth burden.
- Inflation, energy prices, and Federal Reserve policy remain the principal macroeconomic swing factors.
- Within equities, we favor quality and durable earnings; within fixed income, we continue to prioritize high-quality income and tax-aware opportunities.
- Alternatives can play an important role in enhancing diversification, income generation, and inflation resilience.
- Broad portfolio diversification and disciplined positioning remain essential as volatility risks stay elevated.
Read the full report here or explore individual sections below.
Macroeconomic Outlook: A shifting foundation of economic growth
The U.S. economy remains resilient, though on a go forward basis growth leans more heavily on business investment as consumer strength moderates.
Equities Outlook: Strength supported by earnings growth
Equity gains have been driven by better than expected earnings growth rather than valuation expansion, providing a more durable investment framework on a go forward basis The AI investment cycle remains a primary driver.
Fixed Income Outlook: Higher rates offer greater income potential
With yields at attractive levels, fixed income can provide a meaningful source of return and portfolio diversification. We favor high-quality credit and municipals.
Private markets and alternatives: Selective opportunities
An active IPO market, increasing demand for infrastructure, and shifting dynamics within private credit are supporting a constructive outlook for select private market strategies.
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The sole purpose of this material is to inform, and it in no way is intended to be an offer or solicitation to purchase or sell any particular security or investment strategy. Alternative investments may involve a high degree of risk, including the potential loss of principal. They may be illiquid, speculative, and not suitable for all investors.
Neither asset allocation nor diversification guarantees a profit or protects against a loss.
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