BMI Global Market Strategy Update
Below is a small selection of Business Monitor International (BMI)’s global market views, as outlined in our online service:
Neutral US versus eurozone stocks: We had maintained a US over eurozone equities strategy for nearly two years prior to December 2012, before going neutral. At this stage, we remain neutral, given how far US equities have come in such a short space of time. However, we would look to renew our relative bullish US over Europe view should the US market pull back.
Macro-Industry Strategy: Our key Macro-Industry Strategy views remain unchanged this week. Despite recent share price stagnation, we remain bullish towards German real estate, with the fundamentals that underpin our belief in the long-term investment story still firmly in place. While not outright bullish on either sector at present, we have also been looking closely at the US banking sector and global data centre infrastructure market this week.
Italian elections: The slow trend higher in 10-year Italian sovereign yields in the past few days suggests that markets are in ‘wait-and-see’ mode ahead of March 15, when parliament convenes and official negotiations on forming a new government begin. We see three realistic scenarios for Italy’s political trajectory over the next few months, only one of which is likely to offer any support to investor confidence. However, even in a best case scenario we see little hope of significant economic reform.
US nonfarm payrolls: Following last Friday’s data showing an above-consensus 236,000 nonfarm payroll jobs created in February, the change in NFPs has remained above the 25-year average of 102,910 new jobs per month in 22 of the last 24 months. We expect businesses to continue to add jobs at a faster-than-average rate over the next several quarters, and remain above-consensus on US growth.
Our full Global Macro-Industry Strategy views and broader financial market views are available to subscribers at Business Monitor Online.