Natixis vurderer, at der stadig er plads til øget vækst, omend ikke så stærk, som mange har ventet. Der er fremgang i den amerikanske økonomi, og de europæiske hjælpepakker sikrer også en god udvikling, især fordi europæerne vil hindre en ny lockdown med alle midler. Men markederne bliver mere volatile end hidtil, bl.a. på grund af det amerikanske valg. Aktiekurserne er høje, men ikke ekstreme. Natixis reducerer sin overvægt af europæiske aktier og lægger fortsat vægt på asiatiske aktier.
Uddrag fra Natixis:
The news that President Donald Trump and First Lady Melania Trump tested positive for COVID-19 has reinvigorated the world’s focus on the pandemic.
Equity markets reacted slightly to news of the diagnosis on October 2, while credit markets remained comparably still.
Generally speaking, higher volatility heading into the US elections is not surprising, but a number of developments in recent weeks have raised questions about growth prospects as we look to the last few months of the year.
The first is whether US consumption will hold up without the next phase of US fiscal stimulus. The second is whether the European recovery will survive the new wave of virus infections across the Old Continent.
US Recovery Should Hold
Economic data has been robust in recent months, particularly in the US. Retail sales softened in August, but the housing market continues to boom and overall consumption has held up.
However, with the passing of Supreme Court Justice Ruth Bader Ginsburg, the fight over her replacement has likely reduced the odds that the CARES Act 2 will be agreed on ahead of the elections.
The market has reacted in consequence, with a glass-half-empty outlook in recent weeks. However, even if the CARES Act 2 does not pass before November, we believe that the US economic recovery can, and will, continue.
The initial “V” might be over, and consumption might taper off, but the recovery should hold. Nonetheless, bouts of volatility are likely to keep markets on their toes in the coming weeks.
Europe’s Second Wave
In Europe, we have seen PMIs1 weaken with the rise in cases, but confidence remains solid so far, at least in Germany. However, as new “soft” measures continue across Europe, data is likely to soften further, although it should not stall completely.
Indeed, we believe that policymakers will avoid generalized lockdowns at all cost, suggesting the recovery will slow, not stop. However, sentiment could still suffer and growth is likely to be weaker than anticipated, removing one of the recent supports for European assets.
Integration and cooperation – thanks to the Recovery Fund – will remain a long-term support, but might not suffice for now. We therefore have reduced our overweight to Europe, bringing it in line with the US. That said, as confidence in the recovery eventually returns, Europe should benefit from the reopening trade.
Finishing the Year
Today, we believe these developments are priced in. There is little optimism left about additional COVID-19 aid ahead of the elections, which are expected to be complicated. As such, markets are unlikely to collapse.
Indeed, we have seen inflows after some of the bad weeks in September, suggesting investors might be looking for entry points. There is also still plenty of cash on the sidelines, and ongoing central bank support.
We therefore remain overweight equities, though we expect a bumpy ride into the coming weeks.
Equities
While we maintain a constructive view on equities, we believe that October could prove bumpy. Indeed, between questions about US elections, US-China tensions, Supreme Court tensions, US Phase 4 fiscal measures, and European virus cases, headlines are likely to keep investors alert.
That said, we believe that many of these concerns are now priced into markets – or at least expected. Cash remains plentiful, sentiment is bearish and that central bank support isn’t going anywhere. As such, the downside should remain relatively limited, but volatility elevated.
Moreover, while valuations remain high, they are still not extreme compared to recent weeks and especially compared to bonds. Additionally, while markets are focused on the risks, a positive surprise cannot be excluded.
Given concerns about Europe, we have reduced our overweight to the region.
We still believe there is plenty of room for catch-up to their US counterparts and European assets should eventually benefit from renewed confidence in the reopening trade, but short-term challenges remain. In a more risk-off setting, the US should hold up with its more defensive, growth bias. We maintain our preference for emerging Asia within our emerging market allocation.
