Perspectives Pictet

Our 2016 scenario reaffirmed our preference for developed equities over emerging equities. Overall our total return expectation in Japan is similar to expectations in the US and Europe in a 7%-10% range. A number of concerns hang over the outlook for Japanese equities in 2016. The first phase of Abenomics had only mixed success, and plans for the second phase are still vague. Although there are some encouraging signs, the economy’s trajectory remains weak. Earnings have been resilient,...

Further loosening of broad monetary and financial conditions likely, adding to upside risks to the outlook for growth. We were looking for a rebound in euro area bank credit flows in October following a large and unexpected decline in September, largely due to a collapse in lending to non-financial corporations in the Netherlands. In the end, bank lending to the non-financial private sector did recover quite strongly in October and we continue to believe that the credit cycle has legs, in...

[embedded content] Published: Wednesday November 25 2015 Millennials are increasingly driving spending growth in the US. Marianne Johnson, Financial Analyst at Pictet Wealth Management, explains the particular characteristics of this key demographic, and the implications of the generational handover for companies and investors.

November’s upside surprises in surveys (PMI and IFO in particular) are unlikely to dissuade ECB policymakers that more needs to be done at their December 3 meeting. November’s euro area business surveys highlighted that the recovery continues to be largely led by domestic strength. In terms of countries, German surveys (PMI, IFO) surprised on the upside, whereas in France, surveys (PMI, INSEE) were less upbeat than in the previous month, partly reflecting the loss of confidence after the...

Millennials are increasingly driving spending growth in the US. Marianne Johnson, Financial Analyst at Pictet Wealth Management, explains the particular characteristics of this key demographic, and the implications of the generational handover for companies and investors.

Macroview Last week, on November 18th, we published our key takeaways for our 2016 macroeconomic and strategic scenario. In the following post, we feature the conditions under which two alternative scenarios for 2016 , one positive and one negative, could materialize. Please see our “Macroeconomic and Strategic Scenario for 2016: Key takeaways” post for a detailed overview.  Upside risks for a positive alternative scenario Greater acceleration of economic growth in Europe, driven by...

Macroview There is an ongoing debate about whether the world is facing secular stagnation and deflation. In the inflation/deflation debate, we are in the deflationist camp. If economic mechanisms are left unchecked, deflationary forces will rise. DM central banks will struggle to hit their 2% inflation targets. The inflation targeting monetary policy style of the 1990s and early 2000s was followed by the quantitative easing (QE) style after the 2008-11 US subprime and euro area debt...

The minutes of October’s FOMC meeting confirmed that a December hike is firmly on the table. Although monetary conditions have tightened noticeably so far in November, the most likely scenario remains that the Fed will hike rates in December. Conditions for a hike “could well be met” in December The FOMC statement published after the 27-28 October meeting has sounded more hawkish than expected, as it put a December hike more firmly on the table. The minutes of this same meeting,...

Macroview In 2016, we forecast global economic growth of 3.3%, slightly better than in 2015. This will be a ‘goldilocks’ environment (not too hot, not too cold), that allows continued supportive monetary policy. Macroeconomy  US real GDP growth will be above potential at 2.5% (against potential growth of 1.8%), but with an absence of momentum. Growth will be driven by domestic demand. Euro area growth will accelerate modestly, to 1.8%, from an estimated 1.5% in 2015. Domestic demand is...

Today's preliminary GDP reports came in broadly in line with expectations and are therefore unlikely to alter the ECB’s assessment of economic activity. We continue to forecast a gradual pick-up in the pace of economic expansion, largely led by domestic strength. According to Eurostat’s preliminary estimate, euro area real GDP grew by 0.3% q-o-q (1.2% q-o-q annualised; 1.6% y-o-y) in Q3, below consensus expectations (0.4%), thus marking a gentle slowdown from the 0.4% q-o-q recorded in Q2...