Global Investment Outlook - June 2013

Prudential International Investments
In his Global Investment Outlook for June 2013, John Praveen expects the global equity rally to continue as global growth concerns are being offset by central banks liquidity, fresh rate cuts, and easing of Eurozone risks with Cyprus bail-out approved and Italy managing to have a new government. Strategically, global equity markets remain supported by Improving risk appetite as Eurozone begins to re-stabilize with easing of Cyprus and Italian risks; interest rate and liquidity tailwinds with the ECB joining the BoJ and Fed in providing monetary stimulus, and further rate cuts likely by some Emerging central banks; modest GDP rebound in the U.S. after the Q2 soft patch, Japan recovery gaining steam, and Emerging Economies remain on recovery track; earnings on track to healthy rebound in 2013; and still reasonable valuations with market multiples remaining well below long-term averages. (more)

Global Investment Strategy - June 2013

Prudential International Investments
John Praveen’s Global Investment Strategy for June 2013 raises overweight on equities as stock markets are likely to continue to rally, adding to impressive YTD gains, with central banks liquidity and rate cuts, and improving risk appetite as the Cyprus bail-out and new government in Italy puts Eurozone back on stabilization track. Despite the strong YTD gains, stock markets remain supported by improving risk appetite with Cyprus bailout and new government in Italy; interest rate and liquidity tailwinds with the ECB cutting rates, the BoJ continues aggressive reflation, the Fed continuing QE3, and fresh rate cuts likely by some Emerging central banks; U.S. GDP rebound after the Q2 soft patch, Japan recovery gaining steam, and Emerging Economies remain on recovery track; earnings on track to healthy rebound; and valuations are still reasonable with market multiples remaining well below long-term averages. (more)

Global Investment Outlook - May 2013

Prudential International Investments
John Praveen expects the global equity rally to continue as markets remain in the macro sweet-spot of strong liquidity and low interest rates, benign inflation, modest rebound in GDP and earnings growth. Further, valuations are reasonable despite the impressive gains thus far in 2013. Strategically, global equity markets remain supported by: 1) Interest rate and liquidity tailwinds with Japan launching aggressive monetary reflation under new BoJ leadership, the Fed likely to continue QE 3 into late 2013/early 2014, the ECB continues OMT and could ease further, and fresh rate cuts likely by some Emerging central banks; 2) Modest GDP rebound in the U.S., Japan and Emerging Economies; 3) Healthy earnings rebound in 2013; 4) Reasonable valuations with market multiples still remaining well below long-term averages; 5) Easing risk aversion as Eurozone begins to re-stabilize after resolution in Italy and Cyprus; and 6) Emerging Market stocks have to catch up to the impressive gains by the developed markets, especially in the U.S. and Japan. (more)

Global Investment Strategy - May 2013

Prudential International Investments
John Praveen calls for tactical caution as global equity markets face increased risk of a correction after the double digit gains in 2013 YTD. Equity markets, especially the developed markets, continued to rally in March/early April overlooking risks in Cyprus, Italy and Washington. However, stocks are likely to experience a healthy, overdue correction triggered by: 1) A sharp slowdown in U.S. Q2 GDP growth after the strong Q1 rebound; Eurozone recession extending into H1 2013; growth disappointment in China; 2) Continued uncertainties in Cyprus and Italy; 3) Risk of potential Q1 earnings disappointment; and 4) Uncertainty about Fed’s QE exit strategy. Hence caution is warranted in the near-term. (more)

Global Investment Strategy - April 2013

Prudential International Investments
John Praveen calls for tactical caution as global equity markets face increased near-term risks in Cyprus, Italy, Spain and Washington. These increased risks are likely to cause stock markets to struggle in the near-term and prompt profit taking after the strong gains thus far in 2013. The Cyprus banking crisis with the EU levy on bank deposits being rejected by Cyprus parliament carries the risk of fresh contagion across the Eurozone periphery. Italy faces post-election uncertainty with no party securing a majority and the risk of another destabilizing election, while Spain faces political uncertainty with a corruption scandal threatening to bring down the Rajoy government. Meanwhile, Washington remains in a policy limbo with contentious negotiations on the budget and faces "sequester" spending cuts. Due to these increased near-term risks, we keep equities at modest overweight. (more)