Market Insights
October 2024 Review

▶ Major convictions :

– Global rate cuts and Chinese stimulus significantly reduce hard landing risk Global economy is normalizing, with a steady US economy, a weak Euro area, which should remain afloat, and hope for China Companies are still delivering earnings and managing their balance sheets

– Inflation is normalizing but it will not return to pre pandemic lows due to structural factors ( geopolitical shocks, rising public debt, the deglobalisation, greening etc.)

▶ Positioning : Elevated valuations, geopolitical risks in the Middle East, and a tight US presidential election could act as a catalyst for short term volatility

* Fixed Income
– We maintain a cautious stance on long dated Treasuries
– US quality credit remains a hedge against interest rate volatility with regular buying flows. Limited supply and reduced default rates create a favorable environment for European short dated High Yield in the BB spectrum. We favor € Investment Grade rated and Capital Structure over € High Yield (higher yield premium, lower default risk)
– Cautious on Emerging local debt ahead of the US elections

* Equities
– Tactically cautious on US equities as valuations have limited room to increase further. We favor an equal weighed approach and US value
– Cautious on Emerging Market due to increased protectionism in the US elections
– Cheaper valuations in Europe and Japan offer opportunities for a long term play

* Gold
– Geopolitical tensions and the safe haven status of the precious metal pushes us to stay positive on the “yellow metal”, which continues to enjoy strong demand

▶ We kept our asset allocation unchanged