Major equity indexes ended the month of March higher: the S&P 500 and the Dow gained 3.7% and 2.1%, respectively, while the technology-heavy Nasdaq advanced 6.8%. We believe that recent events within the banking sector may lead to further tightening of lending standards and a drop in credit availability that could prove to be a headwind for economic activity. Additional risk factors that influenced our conservative outlook are earnings downgrades, the current interest rate environment, reduced consumer savings, and lower credit card spending. At the same time, we expect central banks to come closer to the end of rate hikes. We utilized the March equity selloff as an opportunity to increase our equity score from 35% last quarter to 52% for the U.S. market.

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