Luca Paolini, Pictet Asset Management.
With China’s strong economic recovery from the pandemic at risk from the Evergrande debacle, investors should look to shore up their defences. We upgrade cash to overweight and keep our rating on equities unchanged at neutral. This month’s Barometer also includes a special section looking at why bond yields might have further to climb and what this could mean for equities.
Global asset classes
We remain neutral equities but upgrade cash to overweight; we also downgrade bonds to underweight.
Equity regions and sectors
We upgrade health care stocks to overweight to tilt to a more defensive profile.
Fixed income and currency
We remain overweight Chinese government bonds.
The complete October Barometer can be found here.