EM debt is a good asset class to weather slowing global growth
Alejandro Arevalo (Jupiter AM) | Capitalising on the economic and political diversity available within EM debt will be key to riding the economic slowdown in 2020.
Markets
Euro caught in global trade crossfire
Monex Europe | The euro’s fortunes turned sour in 2019 despite the year starting with a positive outlook.
Merry Christmas! – Ibex 2020 outlook: 10,005 points and a +4.5% potential growth
Bankinter | We maintain the Neutral recommendation. Our valuation for the Spanish stock index points to 10,005 points, which represents a potential of 4.6% as of Dec-20 and an estimated dividend yield for the 4.5% index, the highest among the indexes analyzed.
Fixed-income management: uninteresting interest rates?
C. Rendu de Lint (UBP) | On the one hand, we have Mr Hyde: the uncertainty that surrounds the US–China trade talks which is impacting world trade. On the other we have Dr Jekyll: world growth is holding up to the tune of 3% for 2019, which is close to its six-year average.
The stock market boom could last until 1Q2020
Intermoney | The week that begins will be shorter than usual to be marked by the Christmas holidays. Thus, European stock markets will open only on Monday 23, Tuesday 24 half session and Friday December 27, while Wall Street stock markets will open on Monday 23, Tuesday 24 (half session), Thursday 26 and Friday, December 27. We believe this week could be quite positive for Western markets, as the picture has been clarified enough in the two sources of uncertainty that have been determining in the evolution of the markets, i) the commercial conflict, and ii) Brexit.
European equities OW surges to 20m high
BofA | Net 40% of investors expect European economy to strengthen over the next 12 months; rising from net 9% expecting it to weaken last month.
S&P 500 and Stoxx 600 jump from 2018 lows (35% and 25% respectively) thanks to the reduction of uncertainties
Intermoney | The S&P500 index has gained almost 35% since its lows recorded in December 2018. The Stoxx Europe 600 surged about 25%, approaching its highest records. Markets have priced in the reduction of the main sources of uncertainty on a global scale. Now, it is key that macroeconomic indicators end up confirming the improvement advanced by investors.
Acerinox and MasMovil will increase their weighting in Ibex35
Acerinox and MásMóvil will increase their weight in the Spanish stock index, accounting for 100% of its capital vs current 80%. On the contrary, Colonial will see it reduced to 60% (vs current 80% ) while Naturgy goes from 60% to 40%.
Who or what is to blame for such low interest rates?
DWS | Although many experts accuse central banks, private sector savings and investment trends are equally important. Eurozone sovereign debt yields have rebounded since the August lows but remain firmly anchored in negative territory. The question is not whether the ECB will raise its interest rates again but how to create an environment in which companies are willing to invest to generate profitability and that part of that profitability returns to the lenders.
Negative rates, negative view
Nicola Mai and Peder Beck-Friis (Pimco) | We believe that negative policy rates could do more harm than good to economies and markets, due to their impact on banks, insurance companies and pension funds, and also a possible adverse effect on consumption. Below, we discuss potential implications for investors.