3 investment strategies for stocks and bonds now
U.S. futures are surging on hopes that the U.S. and Iran are nearing an agreement to end the war. In Asia, South Korea’s Kospi hit another record Wednesday and topped 7,000 for the first time, boosted by technology heavyweight Samsung, which joined the $1 trillion club. European equity markets are also firmly in the green amid a swathe of earnings, including Novo Nordisk, which hiked its guidance after sales of its new Wegovy pill came in ahead of expectations. Here are three investment strategies we heard from guests in CNBC’s Singapore and London studios on Wednesday to help navigate the noise. Banks AI boost Aoifinn Devitt, senior investment advisor at Moneta, said investors should explore trades adjacent to the AI hyperscalers, saying there is a play in financials. She said that major tech players need to issue debt and equity to fuel the AI boom, and this will prove a boon to banks. “We have rates potentially moving things, which will ultimately also translate, perhaps into a better mortgage lending segment, so it all translates well for financials, which is exactly where we can get that breadth in equity exposure that investors may need,” she said. Devitt added there are companies in Asia and Europe “flying below the radar,” saying there will be innovation in that space. “We do see that this long-term diversification on a global scale is key, but equally, that we should be wary of betting against the U.S. in scale within portfolios, particularly those portfolios that are U.S. centric at the moment,” she added. Bond appeal Jeff Blazek, Co-CIO multi-asset strategies at Neuberger, said investors should be adding both bonds and equities to their portfolios, adding that the “yield side of the ledger is actually attractive.” He added that bond traders “have mispriced future hikes that we don’t expect to occur as the year progresses.” “The good news is the volatility in front-end yields has settled down. In the last couple of weeks, we’ve seen central bankers say a bit more of a wait-and-see approach, which we think is absolutely appropriate, because the last thing central bankers should be doing right now is trying to solve a supply shock through policy rate actions.” Long end U.S. yield curve Nicolo Bocchin, global head of fixed income at Azimut, said bond markets were overly focused on inflation and fiscal deficits while underestimating the impact of rising energy prices on global growth. He said that sovereign credit is “very attractive,” more so than the credit space because there is “a risk premium embedded in the curve.” He is also avoiding the short end of the U.S. yield curve, favoring the long end.
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