Will the “Fed put” be enough to ensure further upside to risky assets?
By
👤Natixis IM
Also Interesting
Allocation Perspective
Stocks have rallied this year – MSCI ACWI is up 17% from its late December low – despite lackluster economic growth outside the US. Manufacturing PMIs have fallen to 47.6 in Germany, to 48.9 in Japan, and an average 49.5 in emerging markets. Investors have generally priced out recession fears but are probably not really pricing in any improvement in global activity. Positions are more consistent with an extended Fed pause and stable growth rather than an acceleration. However, as the global economy has slowed and markets rallied, most markets now only look about 5% undervalued. Overall, fundamentals have actually been worsening, going on current activity data (global PMIs), forward-looking components (new orders) or their earnings equivalents (actual EPS, EPS revisions).
By
👤Natixis IM
