The monthly themes often stay the same but with ebbs and flows of importance. Again, we are seeing a focus on Fed action. What was on the table a week ago is now off the table, yet whether the Fed is "one and done" still remains to be seen. With a pass on June Fed action, asset markets are playing the risk-on story, but the weak global PMI shows that slow economic growth will be a growing theme as we move further into the second half of the year.
We generally get nervous with a liquidity-driven market. While we understand investors should not fight the central bank, sustained asset levels have to be driven by earnings from growth not investor driven P/E's. The same logic applies to credit markets. Chasing yield is not a long-term strategy for growth or sustainable investor returns. Similarly, currency moves should not be a function of handicapping central bank differences. Nevertheless, investors have to live in the world given to them not the world they would like to have.
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