Asia FX cautious amid US govt shutdown; yen tumbles after Takaichi’s LDP win
Investing.com -- Societe Generale strategists are advising investors to increase their exposure to risk assets and reduce cash holdings, citing the historically positive impact of non-recessionary Federal Reserve rate cuts on these investments.
The team, led by Alain Bokobza, recommends boosting equity exposure through U.S., Japanese, and emerging markets, as well as small- and mid-cap stocks. They suggest that non-U.S. equities could perform equally well or potentially better than U.S. equities when measured in a common currency.
According to the strategists, financial stocks should continue to lead markets globally, while cyclical sectors are expected to benefit from the Fed’s interest rate reductions.
The bank’s analysis indicates that the conclusion of U.S. growth exceptionalism, combined with an active Fed, will likely cause the dollar to continue weakening, while gold prices should maintain their upward trajectory.
Societe Generale’s specific equity recommendations include long positions in emerging-market stocks, Topix, S&P 500 equal weight, U.S. and Euro small and mid-caps, gold miners, onshore China equities, European banks, and European periphery versus core markets.
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