Citi recommends equities and commodities over bonds
By Alexander Bueso
Date: Friday 05 May 2017
(ShareCast News) - Analysts at Citi recommended asset allocators overweight equities and commodities on expectations for rising real gross domestic product globally and oil prices.
Stock-pickers on the other hand should tilt towards Cyclical sectors, overweighting them, going underweight Defensives.
2017 would be the first year since 2010 in which all major regions would post earnings per share growth: US (+11%), UK (+22%), Continental Europe (+19%), Japan (+13%) and emerging markets (+23%), Citi said.
The outlook for 2018 was also positive.
"How About Next Year? - 2000 was the only synchronized growth year when pro-cyclical trades did not work. Equities fell and cyclicals underperformed as the market discounted a drop in EPS."
However, their own economists' GDP and oil price forecasts did not suggest a similar outcome this time around, they said.
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