Market Compass
April 2019

Edited by the Macro & Market Research Team.
A team of 13 analysts based in Paris, Cologne, Trieste, Milan and Prague runs qualitative and quantitative analysis on macroeconomic and financial issues.

The team translates macro and quant views into investment ideas that feed into the investment process.

  • Central banks increasingly signal a turn to more accomodative policies, which can keep growth alive.

  • On top of that, risk assets can benefit from the stabilization in macro data and inflows, as investors look for alternatives to record low bond yields.

  • However, this will not be a repeat of 2016, and the rally will be shorter, as profits’ growth this year will be more muted than three years ago.

  • We reduce our cash overweight to almost neutral, remain long on equities, credit and Emerging Markets’ assets.

APRIL 2019


US President-elect Joe Biden has unveiled a $1.9 trillion stimulus package proposal. Following the recent increase in cases, China has imposed new restrictions and lockdowns in the Hebei province. Canada has implemented new restrictions and a provincewide curfew in Quebec that will last until February 8. German Chancellor Angela Merkel warned that the recent rise in Covid-19 cases could force the country to prolong the nationwide lockdown until April.
Following a monster rally in stocks last autumn, multiples are well above historical averages, but equity investors can count on lingering low yields, tighter credit spreads and increasing central banks’ balance sheets which in turn maintain low the cost of equity and the discount rate of future cash flows.
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