Crisis Memories Return in Vulnerable Markets

Friday 31 March 2023

Global Investment Views, Equity, Fixed income

   

Crisis Memories Return in Vulnerable Markets

April 2023 | March brought a wake-up call to markets after a complacent start to the year. The trigger was the failure of Silicon Valley Bank and other US regional banks, followed by that of Credit Suisse in Europe. The repricing of core yields and changes to market expectations regarding central bank actions have been massive in both the US and Europe. Bond volatility reached the highest levels since the Great Financial Crisis, while equity volatility also spiked, but to a lesser extent.

01 |  Amundi Institute Insights: The repricing of core yields and changes to market expectations regarding central bank actions have been massive in both the US and Europe.

02 | Fixed Income: We suggest investors actively explore bonds, particularly US government bonds, to provide some stability to their portfolios at a time of tightening financial conditions in the markets and for lending standards.

03 | Equity: Investors can consider focusing on companies with strong balance sheets in the quality and value spaces. In these areas, we look at earnings potential of businesses with operational efficiencies.

Global Investment Views - April 2023

Important Information

Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of March 31, 2023. Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not a guarantee or indicative of future results. Amundi Asset Management US is the US business of the Amundi Asset Management group of companies.

Other news

June 2024 GIV
06/03/2024 Global Investment Views, Equity, Fixed income

Explore the broadening of the rally with Europe

In developed markets, we move to neutral from positive on Japan and we see scope for rebalancing in favor of the UK, European small caps and the US. While the US is displaying strong earnings, we believe Europe should benefit from the moderately resilient economic environment and rate cuts. In government bonds, we are positive on the US and core Europe, along with Italy. In credit, valuations in Euro investment grade appear attractive. We also look for selective opportunities across emerging markets and see oil as providing protection from geopolitical risks.

May 2024 GIV
05/08/2024 Global Investment Views, Equity, Fixed income

Searching for bright spots in a trickier phase

Recent inflation and growth data from the US indicates continued strength in the economy, leading Amundi and various institutions including the International Monetary Fund, to revise US growth forecasts upward. We believe current strong momentum will continue into Q2, but expect a deceleration in H2. Inflation data also points to stickier prices, with upside risks, especially around oil, from the recent geopolitical escalation, opening a difficult phase for central banks. We expect fewer rate cuts but higher uncertainty around policy actions.

GIV-April 2024
04/08/2024 Global Investment Views, Equity, Fixed income

The late-cycle environment continues to play out

Stocks are pricing in a rosy scenario in terms of economic growth, which has led to strong upside already this year, with some broadening of the rally evident recently. These movements are further aided by ample liquidity and robust earnings, particularly in the US. The messaging from the Fed and the ECB has been focused on how important it is for inflation to come down for them to reduce rates, even though the debate continues on whether the neutral rate has moved higher.