Macro views

AIs, market highs, yields rise

June 05, 2024 - 2 min read

Portfolio Manager and Lead Portfolio Strategist – Natixis Investment Managers Solutions

Brian Hess

VP, Investment Strategist – Natixis Investment Managers

Jack Janasiewicz and Brian Hess discuss May’s new market highs, capital spending on artificial intelligence (AI), bond market volatility, and current positioning in the Natixis model portfolios.

Equity markets set new all-time highs, with large-cap stocks continuing to lead the way.
Capital spending related to AI seems like it could actually be a growth driver, not just pushing stock valuations higher but actually pushing the economy higher.
The bond market rallied through mid-month, then reversed, with yields pushing back toward their previous highs as concerns about inflation persist – most notably in international markets.
International equity performance has rallied, particularly in Japan and China, but policy actions are likely to determine whether these trends will continue.
The Natixis model portfolios have been overweight US stocks and underweight international, which up until very recently has worked well – and on a year-to-date basis has still worked well.
Although we had expected to see greater breadth in the markets – beyond large-cap US equities – rates may need to actually push lower for that expansion to occur.
We continue to maintain confidence in the US consumer, supported by data showing that unemployment remains low and real wages are increasing as inflation continues to moderate.

Past performance is no guarantee of future results.

Investing involves risk, including the risk of loss. The views and opinions are as of May 31, 2024, and may change based on market and other conditions. This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary. Although Natixis Investment Managers believes the information provided in this material to be reliable, including that from third-party sources, it does not guarantee the accuracy, adequacy or completeness of such information.

Natixis Advisors, LLC provides advisory services through its division Natixis Investment Managers Solutions. Advisory services are generally provided with the assistance of model portfolio providers, some of which are affiliates of Natixis Investment Managers, LLC.

Natixis Distribution, LLC is a limited purpose broker-dealer and the distributor of various registered investment companies for which advisory services are provided by affiliates of Natixis Investment Managers, LLC. Natixis Investment Managers does not provide tax or legal advice. Please consult with a tax or legal professional prior to making any investment decisions.

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