The move down in long-term interest rates in recent quarters has shed an ominous light. We’ve seen the yield curve invert in the United States, and there is evidence of softening in the underlying economy. The manufacturing sector has been weak globally, and momentum in the service sector has started to fade.
The use of gold as a potential hedge against extreme market outcomes has long been a key tenet of First Eagle’s investment philosophy.
At First Eagle, we’ve long held that the United States does not have a monopoly on good companies. While we think most market participants would agree with this sentiment, asset allocation data suggest US investors in general continue to be significantly underexposed to international equities relative to their share of the global opportunity set.
The Global Value Team shares their current investment thinking and provides a mid-year update on the Global, Overseas and U.S. Value Funds.
As we assess the broader economic backdrop, we see plenty of worries. The US-China trade dispute remains tense, and there are signs that it has slowed global economic growth. Employment in the United States has been at a multi-decade high, but it may, potentially, have peaked.