As every month, find Dorval AM's analysis on their central macro and micro economic scenario sum
- The macro : the paradox of reassuring global GDP growth with still deteriorating conditions in the industrial sector continues. Renewed trade tensions, if lasting, would reduce the probability of a favorable resolution of this paradox.
- Valuation : the record low level of bond yields makes some investors believe that equities are cheap, while the high “Shiller P/E” of the S&P 500 leads others to the opposite conclusion. Both arguments are weak. Equity valuation looks normal to us.
- Market dynamics : equity markets turned very quickly from overbought to oversold. This volatility will not help flows to return into equity funds. Continued outflows have raised the liquidity risk premium on equities, with negative implications for small caps.
- The micro :after huge dispersions last year, regional EPS growths have converged towards moderate levels. The impact of the trade war on US EPS will surely be negative, but it remains difficult to assess, as most US multinationals.
This document is intended for professional clients as defined by the MiFID. It may not be used for any purpose other than that for which it was conceived and may not be copied, diffused or communicated to third parties in part or in whole without the prior written authorization of Dorval Asset Management. No information contained herein shall be construed as having any contractual effect. This document is produced purely for informational purposes. It constitutes a presentation conceived and created by Dorval Asset Management from sources that it regards as reliable. Dorval Asset Management reserves the right to change the information in this document at any time and without notice. Dorval Asset Management may not be held liable for any decision taken or not taken on the basis of information contained in this document, or for any use of this document that may be made by a third party. The figures provided refer to previous years. Past performance is not a reliable indicator of future performance The contents of this document are issued from sources which Dorval Asset Management believes to be reliable. However, Dorval Asset Management does not guarantee the accuracy, adequacy or completeness of information obtained from external sources included in this material.
The analyses and opinions referenced herein represent the subjective views of the author(s) as referenced, are as of the date shown and are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material. This material has been provided for information purposes only to investment service providers or other Professional Clients, Qualified or Institutional Investors and, when required by local regulation, only at their written request. This material must not be used with Retail Investors.