Global equities have powered ahead in recent weeks, in line with our pro-growth investment stance. Our view remains that the global macro backdrop should continue to support investor economic confidence and drive the valuations higher over the next year.
Still, there is a risk for some near-term disappointments, given that the Chinese housing market and industrial economy are maybe downshifting more than investors acknowledge. Also, the US ISM manufacturing index has been boosted by US dollar weakness and is likely to pull back somewhat.
The last few days have seen some slight losses on the part of the FAANG stocks, which the media appear to have greatly exaggerated as if it was something extraordinary that the market could not continue its upward trend and have Tesla quickly reach the $1,000.00 mark. The Fed confidently raised interest rates again, which resulted in a stronger dollar on Forex markets for the time being.
The IMF maintened its forecast for weak economic growth in the advanced economies on Tuesday while citing increasing risks from isolationist sentiment, but upgraded its outlook for emerging markets. "Compared to the 1998-2007 averages, long-term potential growth is now projected to be lower in all regions", it wrote in the statement.
Credit Suisse corrects upwards its growth forecasts for the Swiss economy this year: according to the institute’s economists, the gross domestic product will increase by 1.5% this year, versus + 1.0% expected previously. The 2017 estimate remains unchanged, fixed at 1.5%. And the bank warned: stronger expansion is closely related to the immigrants, who are required to increase the workforce.
The Swiss economy will not get back into full swing in 2017 either, due to a lack of momentum among key growth drivers – in particular immigration. These are the conclusions of the Credit Suisse economists in the latest issue of "Monitor Switzerland".
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