Fynsa
Equity markets continue to struggle between higher interest rates and positive corporate earnings dynamics, associated with the strength of the economy but, above all, the potential of AI.
The market context leads us to believe that we will have drastic interest rate drops during the second part of the year, or at the beginning of next year. Therefore, having exposure to these issuers would provide additional capital appreciation benefits, in addition to the annual carry from the accrual of interest.
Prudence indicates that we should wait for the end of the rate hike cycle to return to investing, but beware that time deposits no longer pay what they did a few months ago and inflation is also falling.
A more balanced overall exposure and active management is recommended to address the concentration risk of passive indexes.
In 2022, private equity investments continued to dominate, although with a slight decrease compared to 2021.
The divergence between equities and interest rate levels cannot go much further and should be reversed.
As usual, I wanted to summarize our main projections for 2023, at the risk of being overcharged in twelve months' time.
As the macroeconomic environment becomes much more challenging in the quarters ahead, it seems unlikely that we will receive further support from the corporate earnings side, leaving the market totally dependent on a potential "Policy Pivot".
