The international sell-off in stock markets earlier this year has made some investors sensitive that the bull run is ending, but Credit Suisse said that everything has yet to come.
The Swiss banking giant has been adding stocks to its portfolio and up till has an “overweight” position on the asset class, global chief investment fuzz Michael Strobaek said Tuesday.
“We’ve bought equities and feel hugely well about it,” he said at the Credit Suisse Asian Investment Convention in Hong Kong. “We don’t see the end of this bull market as yet.”
The bank favored eurozone and emerging markets handles the most, Strobaek said, as well as the energy, financials, information technology and telecommunications sectors. The dollop favored markets were the U.S. and Canada, as well as the consumer staples sector, he totaled.
Strobaek noted that markets were rattled by several geopolitical episodes in the past, such as Brexit and Donald Trump winning the 2016 U.S. presidential appointment. All those incidents were opportunities to enter the market — and he thinks “we’re tranquillity in that environment.”
Earlier this year, fears that inflation could accelerate spooked investors and wiped out the year’s goes just weeks into 2018. But that’s not a signal that the end of the bull is abutting, Strobaek said.
While the bull is indeed “ageing,” there’s yet factors that are positive for stocks, added Credit Suisse’s cut off of global equity strategy, Andrew Garthwaite.
Meanwhile, the breadth of worldwide growth is helping company earnings, Garthwaite wrote in a Wednesday note. He enlarged that he is expecting earnings-per-share to grow 10 percent in Europe and 17 percent in the U.S. this year.
In furthermore, monetary conditions are still accommodative even though the Federal Set aside is looking to hike interest rates, he said.
And in an environment where inflation is prominence, investing in stocks can be a good hedge, Garthwaite said in a presentation on Tuesday.
“Reminisce over that equities are an inflation hedge and bonds are a deflation hedge until inflation rises primarily 3 percent,” Garthwaite said. When that happens, “something of an asset allocation make do” could occur, he added.