It is not all plain sailing for the global economy, but we remain cautiously optimistic. Stocks continue to be preferred over bonds; and within stocks, those of emerging-markets Asia are preferred over US and European equities.
ABN AMRO Private Banking expects a second wave of financial flows into emerging markets, as stated in the bank’s new Investment Outlook published today. This development is driven not only by improving commodity prices, but also by the improving prospects for global manufacturing and consumer demand, which will benefit Asian emerging markets. ABN AMRO Private Banking therefore favours both emerging market bonds and equities for their return and geographical diversification potential.
ABN AMRO Private Banking has ranked first among 35 leading wealth managers and private banks globally in the annual benchmarking study ‘Websites for Wealth Management 2016’ conducted by the Swiss research company, MyPrivateBanking Research.
Financial markets are currently in wait-and-see mode for the US employment report this afternoon, that can support the Fed’s path to a rate hike.
For a day or two, a remote valley is the centre of the financial world: central bankers, finance ministers and economists are gathering at the US Federal Reserve’s annual symposium in Jackson Hole, Wyoming.
Economic growth looks set to improve, albeit at a modest pace. Meanwhile, equity market sentiment remains benign, with major US indices trading near all-time highs. We maintain our preference for stocks over bonds, although we advocate a selective approach towards both asset classes.
Financial markets are currently focussed on the timing of US rate hikes. Next week, investors’ eyes will therefore be on the Jackson Hole speech of Fed chair Janet Yellen.
ABN AMRO reports EUR 662 million underlying net profit for Q2 2016, up 10% y-o-y
The eurozone economy is muddling through and global economic growth is unspectacular. Nonetheless, there is hope that things should improve from here.
In a slow news week, central banks were the main story. There appears little impetus, however, for further meaningful stimulus.
The second-quarter earnings season is going well and the ECB’s asset purchases are supporting corporate credits. But there are also political risks, problems at Italian banks and dented growth in the eurozone.
A new reality has emerged after the British vote to leave the European Union. Economic growth and corporate earnings expansion are now less certain. The current market rally may be a good time for portfolio adjustments.
Equity markets appear to be recovering from the Brexit shock, while bond yields look to stay low for longer. Less optimistic forecasts for economic growth, downward corporate earnings revisions and rising risks dampen the outlook.
While the consequences of the UK vote to leave the EU start to crystallise, problems around Italian banks come to the fore.
After a market-rattling Brexit vote, equity indices recouped some of their losses this week. Safe-haven demand remained high, pushing down yields on German Bunds and US Treasuries.
The negative impact of the decision by Britain to leave the EU is expected to primarily impact economic growth in the UK, with a more mild effect on eurozone and global growth.
The UK’s decision to leave the EU is no reason for ABN AMRO Private Banking to make any drastic changes to its equity policy. ‘It’s senseless to sell equities at fire-sale prices amid the commotion,’ says Didier Duret, Chief Investment Officer at ABN AMRO Private Banking. ‘It is mainly driven by political lack of visibility right after the vote to leave the EU. Visibility will come as the UK and EU leaders have to agree on a workable road map for the UK to exit.’
The repercussions of the British referendum to leave the EU continue to impact financial markets around the world. During the second trading day following the outcome of the Brexit vote, European equity markets and the British pound moved below the early lows seen on Friday. Asian and US equity markets, however, appear more resilient with relatively more modest corrections.
In a historic referendum, Britain has voted to leave the European Union (EU), affecting economy, politics and financial markets.
Last Friday the British people have voted for the UK to leave the EU. Maurits Heldring, senior Equity Analyst at ABN AMRO, shares the equity view on video.
