Steven Meier discusses investing in alternatives with concentration risks. Ian Shepherdson and Gregory Daco react to soft retail sales data, Fedspeak anticipation. Topics include strategic asset allocation, impact of weak retail sales on inflation, housing market analysis, economic stress on lower-income groups, and potential Fed rate cut effects on financial markets.
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Strategic Asset Allocation Shift Towards Private Assets
The New York City Retirement System, led by Chief Investment Officer Stephen Meyer, strategically reduces exposure to US equities, particularly large caps, while reallocating funds to private assets like multi-family and industrial logistics real estate. Stephen mentions a deliberate underweight position in retail and office spaces due to ongoing distress, with a focus on seeking new investment opportunities in private credit.
Concerns Over Deficit and Inflation Impact on Investments
Stephen Meyer expresses apprehension regarding escalating deficits and their potential impact on Treasuries and auction processes. He emphasizes a cautious approach towards investments, particularly in private credit markets, where careful selection of established fund managers like Aries and Oak Hill Advisors is crucial to navigate potential risks and capitalize on existing opportunities.
Consumer Caution and Impact on Economic Indicators
Ian Shepherdson and Greg Daco discuss consumer spending trends, highlighting a cautious approach due to price sensitivity, weakening real income growth, and concerns about job security. They anticipate a potential shift in monetary policy towards easing to address disinflationary pressures and recalibrate the economic environment influenced by a bifurcation in spending patterns across income quintiles.
-Steven Meier, New York City Retirement Systems CIO -Ian Shepherdson, Pantheon Macroeconomics Chairman and Chief Economist -Gregory Daco, Ernst & Young Chief Economist
Steven Meier of New York City Retirement Systems discusses investing in alternatives, stating there's no breadth and clearly there's some real concentration risks. Ian Shepherdson of Pantheon Macroeconomics and Ernst & Young's Gregory Daco react to today's softer-than-expected retail sales data and look ahead to Fedspeak this week.