Special Report

March 14, 2022

Equities remain in a window of risk. Bond market signals are consistent with our defensive, value, quality and large cap tilts. The relative performance of Big Tech to financials is especially sensitive to real bond yields. Long-term inflation expectations are at a critical juncture. An upside breakout would spur a wide-ranging equity selloff. But we are more concerned that a further decline would sustain “risk off” shifts away from global cyclicals, small caps and highly-leveraged companies.

Finally, stay overweight energy stocks, despite the potential for a “buy the rumor, sell the news” oil correction as Russia/Ukraine tensions intensify.