Wednesday 10 July 2019
Investment Insights - Our convictions
Please find below our, our publication "Investment insights" which will give you our vision of the market and our 3 months scenario.
XI COMES FROM VENUS AND TRUMP FROM MA… UHM, FROM ANOTHER PLANET.
Any couple is a fascinating ecosystem that, from start to finish, is driven by the same mechanisms of attraction and attachment. When two people first meet, resemblance creates an attachment, but, paradoxically, attraction lies (almost) exclusively in differences! After a few weeks, months or years (check which box applies) these very differences can turn into imperfections, with “cute little idiosyncrasies” being transformed into “irritating ticks and grating obsessions”. Amorous indulgence at the start gradually gives way to constant exasperation. What’s more, if you are in a “remote” relationship, merely communicating with each other becomes a challenge. Without common emotional reference points, ugly arguments inevitably break out, turning into actual wars when money is involved.
Take the example of Donald and Xi. They had been joined in blissful union for more than a year, moving ahead boldly, agreeing to promising compromises. And yet, they had a big blow up in late April and let the whole world know about it. Feeling betrayed in what he wanted to be an exclusive relationship, Trump went ahead and vented his frustration on social media, triggering icy replies from his Chinese companion. And just when we thought they had broken up (negotiations) for good, the two super-presidents, backed by their proactive central banks, found the strength to make up. And this dispelled the glumness that had taken hold on the markets.
Almost nothing has changed in our scenarios. More and more disappointing macroeconomic figures, amidst an across-the-board asset rally, have raised the probability of a “global slowdown in growth” to 45%. Under this dark scenario, equities would be in for a 7.5% to 12.5% drop, depending on the region. Even so, we remain moderately optimistic in our core scenario (45%), as we believe the worst can still be avoided and growth can be stabilized. This would help ease equity markets back into an upward range of gains. Lastly, the return of traditional investors could help prolong the market rally (10%).
Cyrille Geneslay, Multi-asset portfolio manager
Quantitative Equities - ESG: Yes we quant!
By Cyrille Collet, Head Of Quantitative Equity & Thomas Chavet, Product Specialist at CPR AM
Focus - Research and Strategy - Climate change: What does it mean for insurers?
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Overview of our market scenarios at the end of June 2019
Central Scenario: The markets level off after buying into the fact that central bankers will prolong the economic cycle
1st Alternative Scenario: An economic slowdown despite the central banks'best efforts
2nd Alternative Scenario Investors capitulate to rising risk asset valuations
Our next publication will be published in September 2019. Our teams are at your disposal for any complimentary information.
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