Like virtually all major stock markets globally, the US experienced a turbulent December, with a sharp drop in the first part of the month, followed by a gradual recovery in the second half.

Yet, US economic data continued to suggest that economic activity was expanding at a healthy pace. The non-farm payrolls number exceeded 300k for the first time since January 2012. In addition, consumer confidence for December and retail sales for November were stronger than expected.
This was not enough to shield the US equity markets from the sudden surge in risk aversion that occurred worldwide. Weak growth in other countries, the recent appreciation of the dollar, declines in oil prices and the direct impact of events abroad on US long-term interest rates were all factors that contributed to fears regarding the US economy and monetary policy outlook.
Fortunately, hope returned to the US financial markets from mid-December onwards with the FOMC delivering a more dovish-than-expected message. The release of strong Q3 GDP data also helped fuel the US equities rally further.
  • US companies (mainly exporting ones) begin to be negatively impacted by the strong USD. US consumer companies (Consumer Discretionary but even Consumer Staples) will benefit from the lower oil prices.
  • Sector-wise, we focus on US companies with high domestic exposure. We also begin to have doubts on the IT sector, where, even though it is less impacted by the strong USD, stock picking is starting to be become difficult.
  • We have started to increase positions in Energy companies, after the dramatic underperformance of this sector, at the same time taking some profit in Healthcare and Consumer Staples.
  • For the Healthcare sector, valuations remain interesting except for big pharma names, which have become pipeline stories. We remain nonetheless positive on the segment.
  • We have started to increase positions in Energy companies, after the dramatic underperformance of this sector, at the same time taking some profit in Healthcare and Consumer Staples.
 

Monthly Strategic Insight

Maggiori informazioni