Given how strong markets were in 2017, it’s only natural to ask if they can continue their rise in 2018. So far, the answer has been an emphatic yes.

All of our economic, sentiment, and risk indicators continue to indicate a favorable environment for risk assets, as they have for the last several months. Our global leading economic indicators are in the expansion regime globally and across all major regions. Further support comes from our market sentiment and momentum indicators, and from the continued low level of stock market volatility. In short, all of our key near-term measures remain positive.

Given that view, we maintain our overweight position in equities. Within equities, we continue to prefer European and emerging market equities versus the U.S., given their more attractive valuations and relatively younger economic expansions.

Outside of equities, we maintain our overweight to emerging market debt, where real yields remain significantly positive. We are neutral to duration from developed market bonds, broadly diversified across the major regions.

Among currencies we are underweight the U.S. dollar, and overweight emerging market currencies and select developed currencies, including the euro and the Japanese yen.

Finally, in November we added a small exposure to oil in the portfolio. This decision was informed by evidence of strong demand growth and tightening supply. So far this has been a positive contributor to the portfolio, and we are monitoring the position closely given the volatility of oil prices.

Overall, I would be surprised if markets can deliver another year as strong as 2017. But at this point in the year, the global backdrop, with strong growth and rising earnings, remains quite positive in our view.