Economic and corporate-profit recoveries continue along a gradual, upward-sloping catch-up process, where growth speed and composition will be key to landing in a “recovery financial regime” towards year’s end. Transition to the new financial regime will continue amid a sequel of relapses in the real economy, where policy boosters will prove critical, moving the needle between base and risk scenario. Over the next three to six months, while keeping the risk budget unchanged, progressively rotate risk from US HY into deep value/cyclical equities. Global IG remains supported by central banks’ purchasing programs and offer palatable yields. Lastly, expansive monetary policies and safe haven nature will support gold.
Monica DEFEND, Lorenzo PORTELLI