{"id":61789,"date":"2017-03-27T01:21:31","date_gmt":"2017-03-26T23:21:31","guid":{"rendered":"http:\/\/beta.next-finance.net\/strategie\/four-picks-for-investors-following-last-week\/"},"modified":"2017-03-27T01:21:31","modified_gmt":"2017-03-26T23:21:31","slug":"four-picks-for-investors-following-last-week","status":"publish","type":"post","link":"http:\/\/beta.next-finance.net\/en\/strategie\/four-picks-for-investors-following-last-week\/","title":{"rendered":"Four picks for investors following last week"},"content":{"rendered":"

Following last week: The market at a glance<\/strong><\/p>\n

Equities and bonds strengthened worldwide, but the dollar weakened because of the Fed\u2019s more
\ndovish tone on future rate rises. Whilst now at 1%, there is the suggestion another two rate rises will
\nhappen in 2017, this is still below some of the market\u2019s more fearful projections.<\/p>\n

The defeat of the Freedom Party eased concerns of a populist uprising in Europe; representing
\nimportant sentiment ahead of next month\u2019s French elections. However, success by French right-wing
\ncandidate Marine Le Pen cannot be ruled out. As such, caution may return to the financial markets
\nand European bond yield spreads may widen again.<\/p>\n

Emerging markets reacted particularly strongly to these developments, benefiting from renewed risk
\nappetite. Emerging market equities have outpaced developed market equities year to date, with a
\ntotal return of nearly 12% in US dollars.<\/quote><\/p>\n

Earlier in the week, the UK bill to start Brexit negotiations was given Royal Assent, which allows
\nPrime Minister Theresa May the go-ahead to trigger Article 50. This was anticipated and, together
\nwith a majority vote to leave UK base rates unchanged, did not have any market impact.<\/p>\n

Through all of this, volatility as measured by VIX remained very low and performance differential
\nbetween different parts of the equity and bond markets was muted. <\/p>\n

Nevertheless, uncertainties still
\nexist, not least in politics, but also with delivery on President Donald Trump\u2019s policy promises, oil
\nprice volatility, and Chinese action on currencies and market regulation. China has been quiet for
\nsome time but remains high on any black swan index.<\/p>\n

In this environment, investors will likely seek defensive investment options within each asset class.<\/p>\n

Sector performance: A mixed picture<\/strong><\/p>\n

Three picks for investors:<\/strong> US Financials, US Materials, and Global Technology<\/em><\/p>\n

Over the past few weeks there was no clear sector leadership, with a mixed picture for the top and
\nbottom sector performers. US Materials led the pack and, despite the Fed rate hike, Financials in Europe had a strong run, interesting given defensive positioning in recent weeks ahead of the Dutch
\nelections. De-regulation remains topical for Financials as the tone is shifting to be less onerous,
\nwhich may also benefit the sector. <\/p>\n

On a global level, Technology continues to post strong gains as the earnings and growth outlook
\nimproves. The weakness in crude oil has weighed on the Energy sector, and was a notable laggard
\nacross the regions.<\/p>\n

Defensives outperform: But only slightly<\/strong><\/p>\n

Investors beware of:<\/strong> Momentum-style investing<\/em><\/p>\n

More defensive investment styles performed slightly better than the general market, reflecting
\ninvestor caution. Whilst year to date, momentum-style investing saw (essentially buying stocks that
\nhave risen in the recent past) the highest return the dangers of sharp reversal should be kept in
\nmind.<\/p>\n

Fixed income markets gain post Fed hike<\/strong><\/p>\n

One pick for investors:<\/strong> Emerging market debt local currency<\/em><\/p>\n

The Fed\u2019s current rate outlook appears positive for local currency bonds.<\/p>\n

US Treasuries rallied following last week\u2019s announcement, helping all investment grade benchmark
\nperformance. In parallel, peripheral and core spreads tightened in the wake of the Dutch election
\nresults, bolstering the returns of the euro treasury index.<\/p>\n

Emerging market debt local currency could serve as a continued source of return, especially given
\nthat US 10-year yields remain in check.<\/p>\n","protected":false},"excerpt":{"rendered":"

Equities and bonds strengthened worldwide, but the dollar weakened because of the Fed\u2019s more
\ndovish tone on future rate rises. Whilst now at 1%, there is the suggestion another two rate rises will
\nhappen in 2017, this is still below some of the market\u2019s more fearful projections. <\/p>\n","protected":false},"author":1,"featured_media":61787,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1483],"tags":[1809,1655,1651,1437,2087,2068,1713],"_links":{"self":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/61789"}],"collection":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/comments?post=61789"}],"version-history":[{"count":0,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/posts\/61789\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media\/61787"}],"wp:attachment":[{"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/media?parent=61789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/categories?post=61789"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/beta.next-finance.net\/en\/wp-json\/wp\/v2\/tags?post=61789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}