Credit Suisse says markets 'consolidating' not 'correcting', unless ...
By Alexander Bueso
Date: Friday 14 May 2021
(Sharecast News) - Stockmarkets are now set to consolidate, given that inflation is now "a bit more" of an issue, but they are not headed for a 'correction', says Andrew Garthwaite at Credit Suisse.
Unless, that is, inflation breakevens on 10-year Treasuries break above 3.0%, he cautioned.
The upshot from rising inflation expectations, Garthwaite argued in a research note sent to clients, was that they were typically "positive" for cyclicals - especially banks - value stocks and small caps.
Besides Financials, on which they remained 'overweight', Garthwaite's strategy team also "particularly" liked firms with informal links to consumer price inflation.
Those included BT Group, National Grid, Fidelity National Information Services, Capital Health, CK Infrastructure, and Power Asset Holdings.
-- More to follow --
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