5 and 7 this year a sharp drop after the 9The first the prior notice of at least two months vAmount the aborted operations recorded a record 61This applies to biology as for the economyOscillation situations have already been met56 to 13613 dollar while it had declined 3Hire stars of football has never been the guarantee of winning the matchIn Britain TMobile and the operator 3 already doMarch 19 the international monetary fund has given the tempoWhat get the bankers to excellent managersTeun Draaisma, strategist for Morgan Stanley, has review in down slightly its forecast at a year. If he anticipates a relative stability of the markets in the coming months, it does not exclude a dramatic decline. It is now "neutral" on the shares in its tactical allocation.
How do you evolve scholarships in the coming months
The watchword is patience. Do not expect a rebound before mid-2009. The economic context remains very difficult with three major dangers. First, a decline of profits: we expect a decrease of 43 of the profits in Europe for 2008 and 2009, including 33 next year. US housing still expected 18 months of declining activity and prices. Finally, the balance sheets of banks and financial institutions are not yet fully transparent. The debt is still too high. The leverage of debt reduction process will take years. In this environment, we have to revise down our recovery scenarios and we believe that actions have reached the mid cycle. Our target to 12 months on the MSCI Europe is now at 925 points (against 1,100 previously). At the same time, from a tactical point of view, we passed early in the week of "surpondérer" (a position that we had enhanced mid-October) to "neutral" on the shares. Quantitative forecasting models that give them a signal to buy work less well for about three months. In view of the deterioration of the fundamental, we prefer now the cash.
It reached the low points Can the market still drop
Several technical signals show a capitulation: consumer confidence is at its lowest, disbursements of individuals significantly increased, revisions to the decline of the analysts are at the top... At the same time, valuations are very attractive: the "price to book" ratio (calculated from the equity) is currently 1.1, from 0.7 to the low point of 1970. Political and monetary authorities have taken many measures. If our central scenario is that of relative stability of the markets over the next months, I don't exclude a decrease of 50 on current levels. Investors have integrated the idea of a recession and anticipate a decline around 50 of the profits, but they could panic if other problems appeared. Places heavily could drop if deflation fears are confirmed, or if investors emitted doubts on the financing of the public support of the economy.
Do you fear deflation
The bond market has integrated the idea of a deflation, but not the stock market. I do not think that the asset prices can undergo a prolonged decline. The risk of inflation, seems in view of the reductions in rates of central banks and fiscal incentives, to me, for the moment, more than deflation. It should be negative next year annualized inflation figures in the United States, even in Europe, but the "core" inflation, excluding energy and food, should remain positive.
What geographical areas and what sectors do you prefer
At least until mid-2009, should focus on the defensive segments. Although these areas are less well in a technical rebound phase, I would advise against investors to change their allocation. Overseas, markets have profiles more defensive than in Europe. The American authorities, moreover, were more reactive. In Europe, Britain benefits from the weakness of its currency. As the emerging, it must be be careful without widespread situations. China, for example, is interesting.
