On the equity side, investors are closely studying economic data and growth prospects for major economies, observes Carmine de Franco, head of research at Ossiam. As far as inflation is concerned, there does not seem to be any problem following the Fed’s scenario, which sees the situation as transitory.
“If the scenario were to change and force central banks to raise rates, we could see much higher levels of volatility in the markets,” warns Carmine de Franco.
The latter did not see any significant movement towards European stocks, although some investors find them more attractive than US stocks. But the consensus is that the United States is leading the recovery, thanks to its economic dynamism.
Finally, adds Carmine de Franco, the geopolitical risks should not be underestimated: on the one hand, the legislative elections could see the House of Representatives pass into the hands of the Republicans, which could slow down the reform and investment project that President Biden has undertaken in the aftermath of the pandemic. On the other hand, the risks associated with relations between the United States and China should not be underestimated if they were to deteriorate.
“This is why many investors seek exposure to US equities through different management styles that can make a positive contribution to diversification. For example, by using complementary styles (” Growth “and” Low Vol ” ) or even well-balanced multi-factorial approaches “, concludes the head of research at Ossiam.
source: AOF
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