“Tough time” warning news for equity markets



Statements by US Federal Reserve (FED) chairman Jerome Powell at the Jackson Hole Economic Symposium on Friday slowed the Fed’s interest rate policy. After the statements, international investment banks also changed their expectations about stock markets.

According to the MarketWatch report, Credit Suisse Chief Investment Officer Michael Strobaek announced that he had changed his tactical stance for equities, which was just released on August 10. Strobeak updated its neutral stance for overvalued stocks. Borsagundem.comAccording to information gathered by the banks, the banks’ tactical positions indicate a period of three to six months.

In his statement on the subject, Strobaek said: “The markets considered too many expectations as factors and did not have enough economic realities. Therefore, the coming months are likely to be difficult for investors and I think it is time to be cautious and reduce the risks. “ made statements.

The S&P 500 index in the US equity markets fell more than 4% since Powell’s statements. The index has risen 10% since mid-June. Minneapolis Fed Chairman Neel Kashkari said he was happy that equity markets, which underestimate the central bank’s fight against inflation, have become overvalued.

Credit Suisse’s strategic team expects inflation in the United States to fall further, while the tightening in labor and housing markets will continue to drive up costs on the services side. “Furthermore, it seems clear that this combination of steadily rising service sector inflation and an overheated labor market makes a guarantee of a stronger response from the Fed, even after spikes in inflation,” Strobaek said.

The situation is even worse in Europe, which is driven almost entirely by commodity prices, says the Swiss bank’s strategy team. According to the bank, natural gas prices appear to have to remain high in Europe, which must attract supplies of gas that has been liquidated from other markets. “As a result, European inflation is likely not yet to peak,” Strobaek said in his statement on the subject.

Credit Suisse’s chief strategist says markets will have a tough time in the coming months as they adjust as central banks continue to raise interest rates. Strobaek changed the absolute return outlook for developed and emerging market stocks to “unattractive”. The stock market specialist made the following statements in his long-term outlook on global markets:

“The good news is that central banks are making advance rate hikes. The painful rate reassessment process is likely to be relatively short in duration compared to other rate hike cycles in history. It is in the interest of all investors that central banks are successful, otherwise we could face an even more painful future when it comes to asset prices. “

Strobaek advises against running out of stocks outright. Credit Suisse chief strategist, “Throwing in the towel will also likely mean losing the recovery that will follow a definitive correction in the equity markets.” She said.

Holding too much cash during an 8% inflation period is a move that guarantees compromising purchasing power, according to Strobaek. The stockbroker said that private markets with a focus on long-term investments or hard currency bonds in emerging markets present attractive opportunities right now.

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