Perspectives Pictet

The CIO office’s view of the week ahead.As the results of European Parliament elections roll in, some unexpected outcomes are taking shape. While populists across the Union did win new seats, they did not fare as well as expected, while Green parties gained significant ground as voter turnout rose for the first time in four decades. Surprises at the country level could also lead to greater political instability for some constituents. In Greece, Alexis Tsipras’s Syriza party defeat means the...

[embedded content] Head of investments and CIO at Pictet Wealth Management, César Pérez Ruiz says that something has to give when it comes to investment in 2019. While he expects economic growth to uptick in the second half of the year, the current climate of markets moving out of fear and geopolitical uncertainty – in particular the evolving relationship between China and the US – isn’t without its opportunities, especially if you’re prepared to trade fast and look for unintended...

Risk markets where there is room to loosen policy but are undervalued look more attractive than those where the authorities have room to manoeuvre but markets are expensiveAt this mature stage of the business cycle, it makes sense to consider the possible next steps in economic policy, given that we believe it is likely that central banks and governments will do their utmost to prop up the bull equity market as well as economic growth. (This will be especially true in the US as the 2020...

While our forecasts remain unchanged for now, external drags on growth prospects for the euro area look set to persist for longer than we had previously expected.A potential improvement in euro area growth in H2 2019 on the back of a revival in the global economy is in jeopardy due to the intensifying trade dispute between the US and China. The euro area is not directly affected, but its indirect exposure to this dispute is not insignificant. Potentially weaker domestic demand in the US,...

Japan’s latest GDP report reveals some notable weakness in the economy despite the strong headline figures.The preliminary reading of Japanese GDP for Q1 shows that the economy grew by 2.1% q-o-q annualised, beating the consensus forecast of -0.2%.However, behind the strong headline figures, details of the GDP report reveal some broad-based weakening in momentum.Declining corporate capex and sluggish household consumption both drag on domestic demand.The seemingly strong net exports in Q1...

The CIO office’s view of the week ahead.We are in the midst of a decisive elections season, from the surprise, poll-defying victory of the conservative coalition in Australia and Indian general elections last weekend to the European parliament elections in the week ahead. Exit polls suggest Indian prime minister Narendra Modi and his Bharatiya Janata party are likely to return to power with a parliamentary majority. This was positive for Indian equities, which we retain an overweight...

Physicist Pascal Gallo co-founded a company in partnership with Lausanne’s Federal Institute of Technology to create ultra-pure lab-grown diamonds for demanding high-tech applications, longer lasting watches and high-quality jewelleryThe reason for developing the lab-grown diamonds was a search for ultra-pure stones that could enhance the power of energy trans­mission using lasers. Diamonds have extraordinary properties: they are the best conductors of heat which means they can create...

[embedded content] Technology plays an increasingly important role in our lives, from business interactions to the way we communicate in our private lives. Pictet’s 2019 edition of its annual Latam Family Office masterclass – which took place in Nassau, the Bahamas – delved into this topic around the central themes of geopolitics, families and the new power of social media. Alongside a Pictet line-up that included managing partners Marc Pictet and Boris Collardi, guest panelists and speakers...

Reasoning suggests China will not use US treasuries or the RMB as trade weapons.Trade tensions between the US and China have risen sharply but we believe the situation would need to escalate much further before China resorts to the extreme weapons of currency devaluation and/or selling down its US Treasuries.The fundamental reason for this argument is that such strategies do not serve China’s own interests. On the contrary, they could cause severe damage to the Chinese economy.Should markets...

After a strong first quarter for Chinese growth, signs point to a weaker Q2.Latest hard data indicate that China’s growth momentum moderated in April, after a strong Q1. Industrial activity, fixed investment and consumption all weakened in April.In the context of escalating trade tensions with the US, we expect the Chinese government to step up stimulus measures to support growth in the coming months, especially in the area of infrastructure investment and household consumption.Given the...