November 21, 2019

Equities: Positive signs in the macro momentum are discounted in part. We reduced the OW position. Remain constructive mid – term

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In Short

The auto sector performance scores the highest over the past month, on tthe back of decreasing trade war uncertainty, improving German activity and news on incentives foor using electric cars.
Equities: Positive signs in the macro momentum are discounted in part. We reduced the OW position. Remain constructive mid – term
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Highlights:

  • Since early October, as risks on trade and Brexit abated and confidence inddicators stabilized, bond yields have increased and equities rallied.
  • Consistent with a full risk-on phase Banks, Auto, Value and Cyclicals all ouutperformed.
  • After the rally, cyclicals’ outperformance and price-earnings expansion loooks a bit stretched for the short term, conditioning our recent recommendation to reduce ooverweight position in equities.
  • After the rally, cyclicals’ outperformance and price-earnings expansion loooks a bit stretched for the short term, conditioning our recent recommendation to reduce ooverweight position in equities.

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EQUITIES: POSITIVE SIGNS
IN THE MACRO MOMENTUM
ARE DISCOUNTED IN PART.
WE REDUCED THE OW POSITION. REMAIN
CONSTRUCTIVE MID – TERM

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