Towards a change of paradigm?

5th September 2016
-IAM, Gestion de fonds

Olivier Aeschlimann, Senior Financial Analyst- Fund Manager

The speech of Mrs. Yellen, at Jackson Hole, announcing that “… the arguments for a rise in rates have strengthen”, did not stay without effect on the markets. The dollar and banking stocks appreciated while gold and defensive stocks lost ground. Is this the beginning of a new long term trend? A sector rotation towards cyclical stocks anticipating a stronger worldwide growth? We expect rather a long and stepwise return to the norm in a context of moderate growth. The central banks of Japan and the Eurozone maintain negative interest rates and China has adopted a path of weaker growth. This implies that a strong rate hike is unlikely. In this environment quality stocks should continue to pay dividends with a higher yield than government bonds. In addition, real rates remaining very low, gold and precious metals constitute an interesting diversification at a very low opportunity cost.