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Equity Strategy ResearchEquity Strategy Products: Absolute Strategy Weekly, Equity Strategy Quarterly, Trade Alerts, Economics Weekly.
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Equity Strategy: Scope for Spanish Equities to outperform Italy
Multi-Asset: A case for selling Nikkei calls
Our 12-month view remains very different from that of the consensus in that we expect the global business cycle to weaken and we are significantly more bearish of risk assets. Not since 2007 have we been so at odds with the Conventional Wisdom.
Our quarterly Strategic Asset Allocation report provides a summary of how ASR views the prospects for financial markets over the next 12 months. It expresses our ‘core’ calls in terms of probabilities. This also allows our views to be compared directly with the Consensus as tracked in ASR’s latest quarterly Multi-Asset Survey.• We see scope for risk assets to underperform, as global growth decelerates, credit conditions deteriorate and pricing power remains soft
• We expect DM equities to outperform EM as stock markets pull back
• We also recommend a defensive positioning at the sector level within equities
In recent months, financial assets have been supported by ample liquidity and accommodative monetary conditions. But as central banks become more hawkish and QT starts replacing QE, risk assets could be challenged. Furthermore, if we see a China-led slowdown in global growth as we expect over the next couple of quarters and the credit cycle deteriorates in the US, the pressure on risk assets could be amplified.
Where ASR Differs the most from the Multi-Asset Survey Consensus (see red bars below)
Chart 92 : ASR’s Probabilistic Forecast minus Implied Probability from ASR’s 3Q17 Multi-Asset Survey
Equity Strategy: FAANGs: it’s time to play the 2nd Eleven instead!
Multi-Asset: Bond angles to watch as ECB tapers QE
Political Analysis: Progress, but still high risk that Brexit will talks stall
Multi-Asset: Getting exposure to ECB guidance unwind
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This report is not intended to provide personal investment advice and it does not take into account the investment objectives, financial situation and the particular needs of any particular person who may read this report.
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