With Eurozone shares virtually flat in November and EM under pressure amid worries over trade tariffs and the strengthening dollar, US markets outperformed following Donald's Trump's victory in the Presidential election, also helped by the Fed lowering rates by 25 bps. US smaller companies performed strongly amid expectations that domestically exposed companies will benefit from Trump’s policies. Global bond markets ended the month also on a positive note, particularly within corporate bonds with spreads tightening generally across the board, and HY spreads trading already at historical lows. In contrast, European HY widened as spreads were impacted by the political turmoil in France and Germany.
Economic data from Eurozone continued to point to weakness, leading us to an underweighted stance on European equities, combined with still short-termed IG bonds and just a portion of even shorter HY issues.
