Equities Favored Despite Geopolitical Noise as Growth Holds Firm

The featured asset allocation outlook evaluates market positioning amid geopolitical shocks, concluding that underlying economic resilience supports a pro-risk stance. 

• Equity overweight is maintained but diversified globally, reflecting improving earnings dynamics in Europe, Japan and emerging markets alongside continued U.S. strength.

• Government bonds remain underweight as yields appear too low relative to resilient growth and persistent inflation, while Eurozone credit is favored for carry.

• Energy-driven volatility is viewed as temporary, with base-case expectations of limited macro damage despite short-term inflation pressures.

If geopolitical shocks fade as expected, the report suggests markets may refocus on growth, earnings and regional diversification opportunities.