29 October 2018
What's new in the financial markets?
Chief Investment Officer ING Belgium
Thierry Masset, Chief Investment Officer reviews the economic and financial news. Every month, he analyses events that have impacted the financial markets. The context of any potential stock market fluctuations is equally scrutinized. You can find this market analysis and ING's investment strategy by consulting our "Monthly Market Review".
So what are the key points this month?
- A violent surge in U.S. Treasury yields, unleashed by relentless American economic growth and expectations for tighter policy, has repriced risk assets from credit to equities.
- Strong earnings have been the most important factor that has enabled the stock market to ignore the headwinds it has faced this year. If the projection for future earnings suddenly becomes less bullish, it could/should be enough to upset the balance between the bullish & bearish macro factors that are facing the markets right now.
- To hedge against this uncertain environment, we continue to prefer defensive stocks, such as pharmaceutical ones, companies with big capitalization or with stronger balance sheet, cash in yen or safest bonds.
“It is not “La Dolce Vita” on the financial markets with a return of volatility and especially on the equity market, where the VIX index jumped as high as 23.7, a level not reached since March and exceeding this year’s average (15.2).”