Having navigated a number of geopolitical events in 2016, our Dynamic Allocation Strategies team entered 2017 with a more optimistic view.

Several thematic entanglements—including Chinese and European growth and the commodity super cycle—evolved into a single mega theme as oil prices became a singular proxy for growth around the world.

They have now become less entangled as two things occurred: oil prices stabilized within or close to their equilibrium range of $40 to $50, and concerns over the growth rate of the Chinese economy diminished.

Further, many of the global geopolitical inflection points the team navigated during 2016 now reside in the proverbial rear-view mirror. The Brexit referendum, the second Spanish election (and subsequent formation of a minority government), the U.S. presidential election, and the Italian referendum have come and gone.

While there were certainly surprises along the way, much of the uncertainty surrounding these events has cleared and the landscape that remains ahead is certainly less murky.

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