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Investment Strategy

Published September 25, 2023 | 10 min read time

Weekly market insights and possible impacts on investors from the Wells Fargo Investment Institute Global Investment Strategy team.

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Global Equity Spotlight: Peak China pessimism?

  • A number of policy, macro, and geopolitical headwinds have buffeted China and resulted in an exodus of investors and severe underperformance of China stocks over the past couple years.
  • We expect that recessions are still likely to develop in the U.S. and abroad, we urge investors to stay patient and focus on quality in portfolios. We remain unfavorable on Emerging Market (EM) Equities.

Fixed Income: Fed continues to reduce its balance sheet

  • The Federal Reserve (Fed) continues to reduce its balance sheet, which ultimately impacts market liquidity.
  • While difficult to predict, reduced market liquidity can make the market more susceptible to unexpected shocks.

Real Assets: Higher gasoline prices could stick around in 2023

  • West Texas Intermediate (WTI) crude oil prices climbed above $90 per barrel, pushing gasoline prices up to $3.81 per gallon, as of September 18.
  • President Biden acknowledged the spike in prices, but we believe there is not much the U.S. government can do to potentially provide relief to U.S. consumers.

Alternatives: Private infrastructure growth fuels secondary market

  • A substantial increase in allocations to private infrastructure from institutional investors has led to high levels of fundraising over the past decade.
  • We believe current conditions in the secondary infrastructure market may have the potential to deliver outsized returns relative to its level of risk for qualified investors.

Article written by:

Investment Strategy Analyst
Head of Global Fixed Income Strategy

Head of Real Asset Strategy
Investment Strategy Analyst
Lead Investment Research Analyst