Analysts at Ned Davis Research have downgraded the U.S. to a Marketweight 54% from an Overweight 58%, citing a shift in their allocation strategy. The firm believes that fundamentals and technicals favor other economies over the U.S. debt market. The decision aligns with the firm’s neutral view on U.S. duration and a potential increase in allocation to Europe.
Ned Davis Research analysts have reduced the U.S. market allocation from overweight 58% to market weight 54%, citing unfavorable fundamentals and technicals. They have increased Europe and Japan allocations by 2% each. The analysts view the U.S. market as inconsistency with their neutral view on U.S. duration. The spread between the U.S. 10-Year Treasury and the 10-Year German Bund has widened to its highest level since October. The U.S. currency has declined against Europe, Japan, and the U.K. Inflation remains higher in the U.S. compared to Europe and Japan. NDR’s asset allocation recommendation is 65% stocks, 30% bonds, and 5% cash, with an overweight in the S&P 500 and a preference for small caps over large caps.
