Capital Market Outlook

IN THIS ISSUE

• Macro Strategy — Rich Valuations Leave Risk/Reward Skewed to the Downside for High Yield: While spreads could trend at low levels for an extended period of time, tactically, we believe spreads are susceptible to volatility and that risk/reward is skewed to the downside.
  
  
• Market View — What Every Investor Should Know About China's Hukou System: In addition to headwinds like weak employment and falling property prices, China's hukou system remains a structural drag on household consumption and, thus, broader economic growth.
  
  
• Thought of the Week — What's Shaping the Outlook on Oil?: Weaker demand from China, combined with a growing supply outlook for 2025, is a concern and could weigh on oil prices, energy cash flows and earnings in coming quarters.