Page 3 - ISQ UK Aprl 2020

INVESTMENT STRATEGY QUARTERLY

below 1% for the first time ever. If volatility subsides and the economy price war is bound to end soon. Further support for oil is embedded
not only stabilises but resumes its upward trajectory in the second in our expectation that aggressive monetary policy and a burgeoning
half of the year, we’d expect the 10-year Treasury yield to remain budget deficit (~$3 trillion) will cause the dollar to modestly weaken
around the 1.00% level come year end. Given the substantial energy throughout the year. Oil will likely continue to test the $20/bbl level
sector and brick and mortar retailer exposure of high-yield bonds, we this quarter, while lock-downs and demand disruptions are the most
maintain our preference for investment-grade debt. severe, before rebounding towards $45/bbl by year-end.
After the best year for equities since 2013, the 33% plus coronavirus- It doesn’t take a rocket scientist to know volatility will be present in
induced decline has brought investors back down to earth by both the near and intermediate term. Selectivity remains of the
ending prolonged depressed levels of volatility, heightened levels of utmost importance and just as the take-off and landing of the
complacency, and the second longest bull market in US history. rocket are the most critical steps of a flight mission, buying and
However, once fears subside and the benefits of global monetary selling decisions are critical to the success of a portfolio. Exercise
easing are felt, attractive valuations should entice investors back to patience rather than panic, and rely upon your financial advisor and
the equity markets. Therefore, we remain long-term constructive on asset allocation in order to achieve your long-term investment goals.
global equities and prefer cyclically-oriented sectors over defensives. Please be safe and stay healthy!
The Information Technology sector should not be a falling star, as its
secular growth story remains positive with the anticipated roll-out of
5(G) later this year.
Although a long-term positive for the global economy, oil prices have
fallen to levels not seen since many moons ago. The emergence of
the oil price war between Saudi Arabia and Russia, compounding the
dramatic fall-off in global demand (estimated to be worse than the
2008 and 2009 declines combined) has resulted in prices at which the Lawrence V. Adam, III, CFA, CIMA®, CFP®
global oil industry cannot sustainably function. For this reason, the Chief Investment Officer, Private Client Group

Investment Strategy Committee Members

Lawrence V. Adam, III, CFA, CIMA®, CFP® – Committee President, Nicholas Lacy, CFA Chief Portfolio Strategist, Asset Management Services
Chief Investment Officer, Private Client Group
Joey Madere, CFA Senior Portfolio Analyst, Equity Portfolio & Technical Strategy
Chris Bailey European Strategist, Raymond James Investment Services Ltd.
Ed Mills Managing Director, Washington Policy Analyst, Equity Research
Scott J. Brown, PhD Chief Economist, Raymond James
Pavel Molchanov Director, Energy Analyst, Equity Research
James C. Camp, CFA Managing Director, Strategic Income,
Eagle Asset Management* Chief Investment Office
Doug Drabik Managing Director, Fixed Income Research Anne B. Platt, AWMA®, AIF®, RICP® – Committee Chair, Vice President,
Investment Strategy & Product Positioning, Investment Strategy
J. Michael Gibbs Managing Director, Equity Portfolio & Technical Strategy
Giampiero Fuentes Investment Strategy Analyst, Investment Strategy
Kevin Giddis Chief Fixed Income Strategist, Investment Strategy
Taylor Krystkowiak Investment Strategy Analyst, Investment Strategy
Nick Goetze Managing Director, Fixed Income Solutions

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