Markets Edition: Every Cloud Has a Silver Lining
KEY TAKEAWAYS
- The macro outlook for U.S. equities remains positive despite a soft labor market and potential volatility. Key risks include FOMC reconstitution, which could benefit gold, and lagged inflationary impacts from existing tariffs.
- Strategic positioning remains overweight U.S. equities. Unusually dovish Fed pricing suggests opportunities in U.S. curve steepeners and a weaker dollar, while FOMC reconstitution risk reinforces a positive narrative for gold.
- Near-term focus is on September market volatility and the emerging inflationary impact from tariffs. Longer-term, the FOMC reconstitution by February presents a key risk, with the market already pricing in dovishness.
Beata Manthey, Head of European Equity Strategy, and David Groman, Senior Global Equity Strategist, discuss what's driving global equity markets and whether we could see further gains. Topics discussed include the macro backdrop, what's driving divergence within regions, and the case for European equities.
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Beata Manthey, Head of European Equity Strategy, Citi
Beata Manthey is Head of European Equity Strategy in Citi Research. She joined Citi in 2007 as a Global Equity Strategist. Beata is part of a team that focuses on broader equity market issues. Prior to joining Citi, she worked at the European Bank for Reconstruction & Development.
David Groman, Senior Global Equity Strategy, Citi
David Groman is a Director on the Global Equity Strategy team at Citi Research. Prior to joining Citi in 2021, he served as a Financial Economist at the U.S. Department of the Treasury. He has also worked as a cross-asset macro strategist at Goldman Sachs in New York.
