Citi har taget de globale briller på og vurderer udviklingen i USA, Kina og Europa i en sammenhæng. Det er tydeligt, at den store fremgang efter pandemien er slut, og vækstaktier klarer sig nu massivt dårligere end value, men teknologiselskaberne er dog igang med enorme investeringer for at bevare deres position. I Kina ventes næste år en lavere vækst på 4 pct., men de kinesiske aktier er attraktive, og der er stor efterspørgsel fra udlandet. Den aktuelle energikrise i Europa med flaskehalsproblemer har skabt frygt for stagflation, men Citi tror, problemerne er midlertidige og vil ebbe ud til foråret. Måske er vi kommet i et mere smult farvand.
Reviewing Major Events Around the World
This report reviews major events in major regions. Though they are unrelated, they each may impact future global economic growth and growth expectations.
Policymakers raised the US debt ceiling by US$480bn and agreed to fund the government until Dec 3. In the meantime, President Biden met with Democratic lawmakers and suggested a compromise US$2.1trn target for the infrastructure bill. The meeting is an effort to bring House progressives and moderates in the Democratic party together to pass a reconciliation bill without any Republican support.
US September jobs growth at 194k came in much weaker than consensus for 500k and Citi’s 560k. Citi analysts point to 3 key takeaways from the September jobs report: (1) Despite the headline weakness, the report is strong enough to keep Fed on track to taper; (2) It is increasingly evident that the weak hiring is due to a shortage of workers; (3) Two consecutive months of weak hiring as demand for workers outstrips supply means inflationary pressures continue to rise.
Citi analysts still expect the Fed to be on track to taper but think the first rate hike may not occur until Dec 2022. Meanwhile, inflation is likely to remain more persistent and broad-based across both goods and services than Fed officials likely expect.
US stock market watchers also continue to monitor the Fed and interest rates closely as they anticipate how the rate environment may affect shares in various sectors. Most recently, growth shares have underperformed sharply relative to value as rates have risen.
At the same time however, many tech businesses are reinvesting cash into research and client acquisition at increasing rates, and ultimately free cash flow and earnings could likely dominate their valuations. Thus, it is not just sensitivity to the “discount rate” at play in growth share valuations. It is the sustainability of their growth in terms of market size, market share and margins that will matter most.
Past performance is no guarantee of future results. Real results may vary.
China: China’s GDP growth is likely to fall well below 6% in 3Q and the risk of sub-4% growth for 4Q is rising rapidly. Growth is slowing more than policymakers’ desire. Citi analysts believe that China may accelerate cyclical monetary easing into 2022.
Looking at relative valuations, the ratio of mainland stock prices to those in Hong Kong (for companies in both markets) is at a relatively low 1.45, reflecting a high level of pessimism among foreign buyers. Citi analysts see this as a likely counter-cyclical positive for Chinese equities after a prolonged period of underperformance.
Europe: UK and European natural gas spot prices have surged to record levels even as economic activity rebounds. While high gas prices and shortages in the UK and Europe may raise “stagflation” risks, Citi analysts see these price pressures abating toward spring. In any case, the impact on consumers is mitigated by the structure of energy markets and delivery systems across Europe. Services are delivered by regulated utilities and the consumer’s cost is lower and very different from industrial users.
Citi analysts believe that the energy shortage in Europe is temporary and may have a smaller impact on the growth outlook and inflation than expected.
