Investing.com - European markets in negative territory this Thursday -Ibex 35, CAC 40, DAX...- after yesterday's falls on Wall Street and this morning in Asia.
Experts continue to analyse the current economic scenario and the outlook depending on the monetary policy strategy of central banks.
Lewis Grant, global equity portfolio manager at Federated Hermes (EPA:HRMS) Limited, explains that "with the exception of the handful of names benefiting from the AI opportunity, equities have been in the shadow of fear for much of the last year. Finally, measures of risk aversion began to abate last month".
"The timing is interesting: investor optimism contrasts with growing pessimism about the macroeconomic outlook. A decline in US output is increasingly likely, with weaker than expected industrial activity and a labour market that is starting to slow. The June Fed minutes reinforce the possibility of two more rate hikes this year. Investor optimism may be hard to sustain," adds Grant.
"The more the Fed tightens, the harsher the impact on the economy, and the harsher the impact, the faster it will have to lower rates," he warns.
"Excessive tightening would require more drastic action on the easing side, while the current objective of central banks is to find a controlled exit from high inflation with gentle monetary easing on the way out. We do not yet see rapid rate cuts and are preparing for a slow exit, but we are very mindful of excessive tightening measures," says Grant.
"The opportunities in this environment remain large-cap growth stocks, as they sit on strong balance sheets with well-protected market positions. These stocks continue to appeal to growth investors, but also to those who prefer quality," he concludes.
(Translated from Spanish using DeepL)