Sentiment rebound favours rotation towards value
On the economic front, the picture is mixed, but some stabilisation is in sight. The manufacturing outlook remains weak in developed markets (DM), however resilient emerging markets (EM) growth is supporting the global economy. The service sector has been robust almost everywhere and we don’t see any major concern on the US consumer front, the main engine of US growth. In our previous editions, we highlighted our view that global recession fears were overdone and we maintain that stance. From a geopolitical perspective, the situation is tricky in many parts of the world, such as Latin America and Hong Kong, but there is good news in Europe, where the risk of a no-deal Brexit has receded. Investor sentiment is finally turning more positive for Europe after very difficult years.