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Asset Allocation Committee Outlook 4Q19

Two-Tier Growth Revisited

The fourth quarter began with two opposing themes in evidence. Two-tier growth, with the U.S. stabilizing amidst global weakness, is back. At the same time, in a reversal of some powerful, longstanding market trends, investors have moved toward smaller, more economically sensitive stocks.

These themes have led the Asset Allocation Committee to adopt a cautious profile in its asset class and regional views, while favoring more economically sensitive exposures within its preferred markets. As the markets exhibit two-tier performance and the global economy edges back toward two-tier growth, the AAC has adopted an appropriately two-tier view.

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