Growth Scare Signposts - VP July 2024 Asset Allocation Call [video + AI summary]

• Macro: Our US macro outlook is still "benign, not bonanza" but we are not oblivious to other strategists' calls for recession. We have created a “growth scare” checklist of 9 signposts to turn more cautious. Currently, 3 of 9 conditions are met, indicative of some but not high concern.
• Equities: Cyclically neutral, stay focused on relative value (US homebuilders, US electronic components, energy, goldminers, Brazilian equities). A Republican sweep creates potential for a shift in sector leadership post-election. Public pension funds still face funding shortfalls, necessitating a reach for growth and duration, which creates a structural bid for growth equities.
• Real Assets: Covid was a watershed moment that showed politicians how they can use fiscal policy to win political support, making larger deficits and greater government involvement a feature in the coming decade. This favors real assets like gold over nominal bonds as the preferred risk-off asset in the next downturn.

Links to Asset Allocation and Desert Island dashboards.