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 Thursday 28th March 2024

Seven people have been questioned by police in a fraud investigation relating to the loss of almost half a million euros by Nice university hospital.... Evening Update Thursday 28th March 2024 Read More

28/03/2024

French and Riviera News Thursday 28th March 2024

France's prime minister Gabriel Attal has announced that a teenage girl who falsely accused her headteacher of striking her in a heated exchange over... French and Riviera News Thursday 28th March 2024 Read More

28/03/2024

Evening Update Wednesday 27th March 2024

The mayor of Nice, Christian Estrosi, has asked for national police reinforcements to help bring the Les Moulins housing estate under control.... Evening Update Wednesday 27th March 2024 Read More

27/03/2024

French and Riviera News Wednesday 27th March 2024

The headmaster of a high school in Paris has resigned after receiving death threats on social media following an altercation with a student, which dat... French and Riviera News Wednesday 27th March 2024 Read More

27/03/2024

Evening Update Tuesday 26th March 2024

More than 20 secondary schools on the Riviera have been targeted by bomb alerts today, forcing some of them to stay closed all day.... Evening Update Tuesday 26th March 2024 Read More

26/03/2024