Equity markets have been gripped by ongoing trade tensions between the U.S. and China, but Wilmington Trust Senior Investment Strategist Meghan Shue still sees potential areas of opportunity amid an uncertain global backdrop.
We have recommended a gradual reduction of equity risk over the past year, and our client portfolios currently hold a neutral allocation to equities.
However, shunning all stocks within the cyclical sectors may paint the equity market with too broad a brush and you may risk missing out on compelling investment opportunities. Our "protectionist playbook" identifies pockets within these cyclical sectors that may hold up better over a 12 month horizon if trade frictions persistThe damaging effects of higher prices and greater uncertainty have resulted in markets being whipsawed by trade headlines. In our view, the next round of tariffs on $300 billion of U.S.
From an asset allocation point of view, we have recommended a gradual reduction of equity risk over the past year, and our client portfolios currently hold a neutral allocation to equities. We have also increased our allocation to defensive assets like high-quality fixed income, hedge funds, and cash.equities? Trade headlines are dominating the market in a binary fashion, from "risk on" to "risk off.
earlier in August that increases defense spending, along with the general escalation of geopolitical tensions around the globe, are supportive for the industry.—From a long-term, structural standpoint, we still like tech hardware because of the technology revolution that is sweeping across the economy, increasing demand for chips in everything from cars to appliances. However, semis are more cyclical and also more exposed to disruptions in U.S.–China supply chains than are software companies.
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