Janus Henderson’s US-based Multi-Asset Solutions Team present their latest Tail Risk Report, using options market prices to infer expected tail gains and losses for each asset class.

Key takeaways:

• Among the more attractive pockets of global stocks are China, Japan and US technology on the back of a brighter trade outlook.
• A thaw in geopolitical risk, a strengthening labour market, and the intent by the US Federal Reserve to keep rates low suggest that recession is unlikely to materialise.
• Options-based model signals have taken a bearish view on duration with a greater risk that interest rates will rise than fall.

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Tail Risk Report