Index Option Calls
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Index Option Calls
No Result
View All Result
Home Latest News

Strategists urge investors to look through omicron volatility and stay the course

by
November 30, 2021
in Latest News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

RELATED POSTS

Boeing’s Starliner capsule lands, completing a crucial step toward carrying NASA astronauts

Nasdaq 100 futures fall after chip giant Nvidia delivers light guidance

A trader works inside a booth on the floor of the New York Stock Exchange (NYSE), November 8, 2021.

Brendan McDermid | Reuters

LONDON — Stock markets could be facing several weeks of volatility following the emergence of the omicron Covid-19 variant, but strategists and economists are cautioning investors against hasty action.

Global stocks sold off sharply on Friday as news of the variant, and its potentially concerning mutation profile, spread. U.S. and European equities recouped some losses on Monday but futures turned lower again Tuesday amid fears about the efficacy of vaccines when faced with the omicron variant.

Health officials have said it could take several weeks to understand whether the new strain can evade existing vaccines and antibodies, and how severely it affects those infected.

In the meantime, however, many countries have imposed new travel restrictions, and strategists suggested on Monday that the market will remain attuned to ongoing research into the variant in the near term, sparking volatility.

But although Friday marked the worst pullback in equity markets of 2021, strategists and economists do not yet see a case for a sustained decline, and have broadly advised clients to focus on the long-term fundamentals of the recovery.

Financials, health care, energy

Mark Haefele, chief investment officer for global wealth management at UBS, said in a note Monday that omicron was unlikely to warrant a change in the belief that the global economy is on a bumpy road to recovery, and that growth will be robust.

“We advise against hasty shifts in investment strategy and recommend staying invested. The market reaction may have been exacerbated by relatively low liquidity in Thanksgiving week, and volatility could remain elevated in the days to come as systematic investors readjust positioning,” Haefele said.

“A period of market volatility after such a strong rally should also not come as a major surprise. But it does serve as a reminder of the value of being diversified across markets and sectors.”

On a sector basis, Haefele is positive on financials and energy. He expects oil prices to remain elevated through 2021 and 2022, with international benchmark Brent crude hitting $90 per barrel by March.

“Financials were hurt by falling yields on Friday, but following the strong 3Q [third-quarter] reporting season, sector earnings have been upgraded and recent European Central Bank data point to an increase in private sector credit growth,” Haefele added.

Haefele also recommended that investors seek opportunities in health care stocks, which he argued offer “both defensive and growth opportunities.” He said the strategic outlook for the sector remains strong and valuations are attractive following recent losses.

“A catch-up is overdue, in our view. We believe this has become more likely as uncertainty surrounding U.S. drug pricing is resolved,” Haefele said.

UBS has increased its exposure to alternatives such as pockets of private equity and hedge funds which strategists think are well-placed to offer risk-adjusted returns in falling markets. Haefele also recommended investors look for “unconventional sources of yield,” such as private credit or dividend-paying stocks.

Time for a pullback?

George Lagarias, chief economist at Mazars in London, said in a note Monday that while it is difficult to say whether Friday’s pullback was an overreaction, the evidence suggests that investors should wait it out before engaging in talk of a correction.

“Global stocks had already gained almost 21% year-on-year, and even if the event hadn’t happened, it would not have been the worst time for market participants to take some profit off the table,” Lagarias said.

With ample liquidity in the markets, he suggested that investors may look to take advantage of lower valuations and put their money back to work. This trend seemed to emerge in Europe and the U.S. on Monday, as markets rose.

This sentiment was echoed by Berenberg Chief Economist Holger Schmieding, who told investors on Monday that the surge in uncertainty explained Friday’s markets reaction, but the long-run fundamentals of the recovery were more likely to be delayed than derailed.

Schmieding acknowledged that the news flow could get worse before it gets better in the coming days, but said it is unlikely to dramatically shift central bank approaches with regard to monetary policy tightening.

“As we have argued since mid-March 2020, the pandemic does not justify a dramatic and lasting re-rating of the value of the productive capacity of major economies as expressed in the overall levels of equity prices,” Schmieding said.

“In short: we do not see Omicron as a reason for a sustained bear market.”

ShareTweetPin

Related Posts

Boeing’s Starliner capsule lands, completing a crucial step toward carrying NASA astronauts

by
May 25, 2022
0

In this article BA Boeing's Starliner spacecraft is seen before docking with the International Space Station on May 20, 2022...

Nasdaq 100 futures fall after chip giant Nvidia delivers light guidance

by
May 25, 2022
0

A trader works at the New York Stock Exchange NYSE in New York, the United States, May 18, 2022. Michael...

Best trades on CNBC Wednesday: Pros are making these big portfolio moves despite an unstable market

by
May 25, 2022
0

Market Movers rounds up the best trades from investors and analysts on CNBC throughout the day. Traders say they are...

Elon Musk backs ‘tight’ background checks for all gun sales in wake of mass shooting in Texas

by
May 25, 2022
0

In this article ABT TSLA Elon Musk speaks on stage during the Westworld Featured Session during SXSW at Austin Convention...

Feds say Twitter used contact info collected for security purposes to target ads

by
May 25, 2022
0

In this article TWTR Musk would have been appointed to Twitter's board on Saturday, but the world's richest man informed...

Next Post

Peloton Has Tumbled From Its Peak. What to Do With Your Beaten-Down Shares.

Dow futures down more than 400 points on omicron Covid uncertainty

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:

By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

MOST VIEWED

  • A Couple Stored IRA Gold at Home. They Owe the IRS More Than $300,000.

    0 shares
    Share 0 Tweet 0
  • A California Couple Spent Eight Years Building Their Dream Retirement Home in Costa Rica

    0 shares
    Share 0 Tweet 0
  • Goldman Sachs says buy these stocks to play Web 3.0 and the metaverse

    0 shares
    Share 0 Tweet 0
  • Goldman Sachs picks new stocks to buy — and says these 5 have over 100% upside

    0 shares
    Share 0 Tweet 0
  • In his final warning, this stock trading wizard — who made big money in bear markets and crashes — called this market a bubble like no other

    0 shares
    Share 0 Tweet 0
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by www.indexoptioncalls.com
No Result
View All Result
  • Home
  • Latest News
  • Email Whitelisting
  • Privacy Policy

All rights reserved by www.indexoptioncalls.com