Citi har lavet en ny vurdering af markedsforholdene og påpeger, at de største risici er, at den nuværende vækst ikke holder, og at der kan komme rentestigninger, der vil påvirke økonomien negativt. Hvad aktier angår, lægger Citi mere vægt på mindre og mellemstore globale aktier og reducerer vægtningen af store europæiske selskaber. En vedvarende svag dollar svækker værdien af amerikanske aktier. Asiatiske aktier udgør fortsat en “ustoppelig trend”, siger Citi.
Position for Growth, Rate Risks and Weaker USD
Anticipate potential growth disappointments and rising rates
Two major risks for markets going forward are likely to be sustaining the growth that is underway, and sensitivity to rising interest rates. Looking ahead to 2021, Citi analysts expect growth to accelerate and medium and long-term interest rates to eventually rise. When even a modest amount of inflation returns, rising rates can create risks to the economy and portfolios.
In anticipation, the Global Investment Committee (GIC) has made recent asset allocation changes: Moving from neutral to overweight on global small- and mid-cap shares, underweight to neutral Europe large cap shares, neutral to overweight US high yield bonds, and decreasing US Treasury short- and intermediate maturities to neutral.
A longer-term weaker USD and the case for diversifying into non-US assets
A long period of USD strength has partly resulted in a massive valuation discount for Emerging Markets (EM) shares. US equities hold a record 57% share of total world market capitalization while EM equities’ share has fallen. This is despite EM’s smaller drop in profits compared to US profits in 2020.
Citi analysts believe the broad US dollar basket may have peaked in value in early 2017 and expect the USD to depreciate over the next 5-10 years. Thus, there are likely to be diversification benefits from owning non-US assets.
EM strength this year has been concentrated in Asia, where long-term savings and investment dynamics make the region one of CPB’s “unstoppable trends”. Latin America is also overweight with opportunities for recovery.
