Luke Parsons

We have more in equities and less in bonds in our shorter-term tactical asset allocation. Global growth continues to be robust, supported by a resilient US consumer and ongoing investment in artificial intelligence infrastructure. Meanwhile, the Federal Reserve is cutting interest rates again. We think rate cuts in an environment without recession and strong company earnings growth is supportive for US stocks moving forward. We are paying close attention to valuations given how far equity markets have moved since the trough in April this year.

While a lot of political headlines have emerged from Europe, we still think equities can move higher in the region: rising economic growth, ongoing government spending and a central bank that has been cutting interest rates over the past year should be supportive for markets. In Asia, equity markets can benefit from solid global economic growth and more trade if tariffs stay low. We have less in bonds as we think high government spending without taxes to match means long-term bond yields need to move higher to entice investors to buy government debt.

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