Head of Saxo Strats
Summary: The 'bounce back basket' is down 14% since March 9 but we the latest policy moves it may soon be time for investors to increase exposure to high quality and beaten down stocks.
The ‘bounce back basket’ was introduced on March 9 as the sharp selloffs in equities made us come up with a list of 20 high quality equities in the US and Europe that investors should look if the market continued to fall. The stocks in the list are meant as inspiration and not recommendations to buy. Investors should do their own analysis.
As of yesterday’s close the ‘bounce back basket’ was down 14% on average in local currency with ConocoPhillips (COP:xnys) and Align Technology (ALGN:xnas) being down the most. With the policy moves in the last 24 hours from the Fed starting a Money Market Funds Liquidity Facility, ECB launching a €750bn quantitative easing programme in bonds and RBA announcing effectively yield curve control on 3-year government bonds there is definitely scope for some risk-on sentiment.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
