Friday 16 February 2018
Publications
INVESTMENT INSIGHTS, OUR CONVICTIONS - FEBRUARY 2018
Find out the monthly market macroeconomic and product overviews :
EDITORIAL : EVERYTHING IS FINE...
The new year has begun with its usual combination of hopes, beliefs and illusions, that we are repeating over and over again like mantras, to convince ourselves that everything will turn out fine. According to the Chinese horoscope, 2018 is the year of the Earth Dog – which as you may or may not know – is governed by the ninth star, which will move in the middle of Luo Shy square during the year and bring prosperity to all!
People who are more down to earth - and who would need confirmation based on hard statistics - could fall back on the old American saying ‘As January goes, so goes the year’, which suggests that the performances recorded in January will reflect those of the full-year – an adage that turns out to be true in 68% of cases! The economic data published during the month supports this belief. Growth remains strong globally, and while surveys are starting to level out, they remain at historically high levels. In the United States, the earnings season has begun and out of the 203 S&P 500 companies that have already published their earnings in January, 169 beat expectations while 29 fell short. So things are fine, as confirmed by the bullish equity markets - with gains ranging from 1% in Japan, to almost 6% in the United States, in dollars. However, there is a small issue that needs to be mentioned: in its planned review of import taxes, the Trump administration has chosen to increase the taxes on solar panels to 30% and those on washing machines to 50%. This highly symbolic decision has reignited fears of escalating trade tensions and a strong resurgence of America First. But apart from this, rest assured – everything is fine. Well, everything is fine as long as we ignore the fast rise in interest rates (too fast?), which is currently crushing the equity bull market.
Things are fine… So, our central scenario (50%) remains based on this assumption - a scenario in which the potential upside on equity markets remains contained, however. If inflation were to accelerate sharply (30%), the consequences would be rather negative for the market, both for fixed income and equities. Finally, we should not exclude the possibility that the complacency observed in 2017 will come to an end; this would have a negative effect on the stock markets, but would be rather soothing for fixed income.
Cyrille Geneslay, asset allocation portfolio manager
INFLATION & FIXED INCOME - Inflation to make a comeback in 2018
By Valérie Quesada & Christophe Dhondt, Portfolio mangers - inflation & fixed income
- MACRO ECONOMIC ENVIRONMENT -Will 2018 be Japan's year?
By Laetitia Baldeschi, Co-head of Research and Strategy
3-MONTHS FINANCIAL SCENARIO - END JANUARY 2018
- CENTRAL SCENARIO: POSITIVE GLOBAL ECONOMIC MOMENTUM CONTINUES.
- ALTERNATIVE SCENARIO 1: END OF MARKET COMPLACENCY
- ALTERNATIVE SCENARIO 2: SHIFT IN INFLATION PERCEPTIONS
Our next publication will be in March 2018. Our experts are available for any further information. Best regards.
Contact us
Need more information?
Need more details on how this offering can be subscribed?
Feel free to ask us questions.