“Risk on” sentiment continues, by Blackfort CIO Dr. Andreas Bickel

 

“Risk on” sentiment continues, by Blackfort CIO Dr. Andreas Bickel

Climbing the wall of worry. According to BAML Global Fund Manager Survey, professional investors have reduced their equity exposure; they are underweight bonds and overweight cash. However, YTD “all” asset classes are based on Morgan Stanley’s analysis in the green. Cash in USD at least gives you a positive nominal return. But in EUR, JPY or CHF you actual get negative yields. The key question is: Have we reached the trough of the slowdown? In the US, the picture is mixed, but in Europe, UK, Japan and China so far most of the indicators are still falling. Nevertheless, this was priced in before Christmas. In Turkey for instance the manufactures confidence is since two months rising. Turkish equities were among the best performing assets YTD, Turkish corporate hard currency bonds gained more than 5% and the currency strengthened. This although the country is in a recession. The bet for the rest of 2019 is on a possible turning point of the business cycle. Short-term global “risk on” sentiment might continue. However, as most assets have risen strongly it must be expected that a consolidation will soon follow. But the pain is on the upside. Especially in the light of the positioning of professional fund managers.

 

 

Source: https://www.linkedin.com/feed/update/urn:li:activity:6501367847497793536/

Published: 14.02.2019 by Blackfort CIO Dr. Andreas Bickel

 

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