IC's weekly comment: Unchanged scenario

11-06-2013 15:02

The outlook presented in "Placeringsnytt” (Investment News) a week ago remains unchanged. We can see improvement in the global economy and an increasingly robust recovery in the US. At the same time, emerging markets are slowing down and the recession in the eurozone continues.

"The global stock markets have been quite turbulent at times,” said Martin Bolander, market strategist at Swedbank Investment Center. "Especially in Asia, and particularly in Japan,” he continued.

"The Japanese stock market did extremely well earlier this year, so it is not surprising that it is now slowing down,” he went on to say. And in China the economic slowdown means that the expected growth rate will be 7-7.5 per cent, instead of, as previously with returns of around 9 to 10 per cent.

Unemployment – a complex case
US performance makes interpretation of unemployment figures complex. Despite rising unemployment, the stock market reacted positively, rising by 1.5 per cent on Friday.

"Employment, i.e. the number of jobs, did actually rise more than expected. At the same time the labour supply increased even more, leading to higher unemployment figures. This is due to increased confidence in the ability to get a job. Many of those who were once considered a hopeless case are now registered as job seekers, which is of course positive,” he continued.

Europe remains in recession, except northern European countries such as Sweden and Finland. Germany's central bank, the Bundesbank, has revised down its forecast for growth in Germany to 0.3 per cent for 2013, however this is still positive.

"We still believe in a better second half of the year than the first and look upon the future with some confidence,” Martin Bolander continued.

Riksbank on Wednesday
The scenario and recommendations in the latest "Placeringsnytt” remain.

"Partly because stock market performance, particularly in the US, has been acceptable. And partly because the low bond yields mean that there are some good alternative investment opportunities. Finally, please note that Stefan Ingves will make a speech on Wednesday. What he says could perhaps increase the possibility of an interest rate cut in July,” Martin Bolander concluded.