Barclays Market Perspectives October 2019

Welcome to the October edition of “Market Perspectives”, the monthly investment strategy update from Barclays Private Bank, which is also available to download as a PDF [PDF, 325KB].

Persistent trade tensions and rising geopolitical risks are taking their toll on the global economy. Indeed, Germany appears close to recession. But this is due to its high exposure to manufacturing, which has been the main victim of the ongoing trade dispute. Services and households continue to be resilient and should prevent a global recession. At a time of such elevated uncertainty, we prefer companies exposed to areas immune to trade tensions.

Sentiment towards equities improved in September on hopes of a US-China trade accord. However, limited upside to earnings and rich market valuations mean that equities are unlikely to break significantly above their trading range. That said, several opportunities exist for active managers to add alpha.

In particular, we keep our preference for quality stocks. While value stocks rebounded strongly against their quality peers in September after years of underperformance, quality stocks remain a more compelling investment style and are likely to regain the ascendency soon.

Despite concerns over high leverage levels and an economic slowdown, the outlook for investment grade debt is positive. However, security selection will be key for speculative grade debt this late in the cycle, as the risk of a surge in default risk rises.

Private debt assets under management have more than trebled in the ten years to 2018, buoyed by low interest rates and an expanding pool of negative-yielding fixed income securities. Prospects for the asset class remain positive, not least thanks to different strategies which benefit at different times of the economic cycle.

Jean-Damien Marie and Andre Portelli
Co-heads of Private Bank Investments

Last local news

Evening Update Monday 16 April 2021

The Covid 19 incidence rate has dropped below 250 for the first time since Christmas. In the Alpes-Maritimes, it currently stands at .. ..... Evening Update Monday 16 April 2021 Read More

19/04/2021

Lunchtime News Monday 19th April 2021

France’s employment minister Elisabeth Borne has said this morning that she wants "priority access" to vaccination for binmen and bus drivers over 55 ... Lunchtime News Monday 19th April 2021 Read More

19/04/2021

French and Riviera News Monday 19th April

After more than two weeks of lockdown the number of intensive care patients in France has dropped slightly below 5,900. With health authorities claim... French and Riviera News Monday 19th April Read More

19/04/2021

Evening Update Friday 16 April 2021

French Health Minister Olivier Veran has said that the level of circulation of the virus in France is "too high" and the lifting of the curfew "is not... Evening Update Friday 16 April 2021 Read More

16/04/2021