All Asset allocation articles – Page 18
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White papers
An earning season better than expected but the valuation issues has not yet been resolved…
There was a substantial decline in Q2 earnings but they turned out to be better than expected; their decline being ultimately less pronounced than during the Great Financial Crisis (GFC) of 2008-2009, whereas the current recession is much more severe.
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Markets scenarios & risks - September 2020
We marginally amend the narrative of our central and alternative scenario on the back of recent development. Recent data confirm a slower recovery path in line with our central scenario. We therefore increase the probability of our central scenario from 60% to 70% while reducing the likelihood of the upside alternative scenario from 20% to 10%.
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Macroeconomic picture - September 2020
A new Covid-19 outbreak in several states in July and August imposed more caution in reopening the economy, slowing recovery momentum. The labour market remain distressed. In the coming quarters, the US economy is expected to continue along a gradual and progressive recovery path, underpinned by easy monetary policy and a delayed new round of fiscal support.
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Thematics: Eurozone government bonds, a supportive mix of remarkable funding progress and ECB QE still to come
Funding progress looked quite encouraging at July end for Eurozone government bonds, as roughly 80% of estimated yearly net issuance have been placed, mostly (more than 50%) in just four months, between April and July. Putting remaining supply in perspectives with ECB flows, the technical picture for EZ government bonds looks friendly to the current environment of low core yields and subsequent, persisting search for carry.
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Thematics: Back to school, back to politics?
The macro-economic backdrop has improved, albeit at a slower pace more recently. The European response to the crisis has further strengthened investor sentiment. However, the political picture has changed over the summer in the US and deteriorated in emerging markets.
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Global Investment Views – September 2020
The appetite for risk assets has remained strong over the summer lull. This summer season has seen both the confirmation of existing themes and the emergence of new ones. On the former, the decoupling between the real economy and financial markets has proved persistent.
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Is There Opportunity in COVID-19 Valuation Dislocations?
Capital markets have rebounded from their COVID-19-induced lows, but impacted industries have lagged substantially. That pessimism may be overdone in some cases, creating opportunities for multi-asset investors to exploit dislocations.
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Monthly Allocation Views
It’s clear that this is not a normal summer. Allocation Views discusses adapting to a new way of doing things.
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Taking savings seriously
A penny saved may be a penny earned, but you still have to save it, and this is a task that’s getting harder and harder in today’s complex financial world. That’s where the Asset Allocation team of the Quantitative Research Group (QRG) at BNP Paribas Asset Management comes in. It seeks to give clients access to all possible financial tools with which they are most likely to secure and increase their savings over the long term.
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Global Investment Views – August 2020
As we enter the summer, conflicting forces in major equity markets have led to a period of temporary equilibrium between fear(risk of second wave, low bond yields, high gold prices) and greed (equities rallying as a result of economies reopening). The big question for investors now is: where do we go from here?
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Multi-Asset Allocation Views: Growth momentum in the global economy is improving
Growth momentum in the global economy is improving.
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Improving the Robustness of Trading Strategy Backtesting with Boltzmann Machines and Generative Adversarial Networks
In this article, we explore generative models in order to build a market generator. The underlying idea is to simulate artificial multi-dimensional financial time series, whose statistical properties are the same as those observed in the financial markets. In particular, these synthetic data must preserve the first four statistical moments (mean, standard deviation, skewness and kurtosis), the stochastic dependence between the different dimensions (copula structure) and across time (autocorrelation function).
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Asset Allocation Committee Outlook - 3Q 2020
“We are confident that the economy will be bigger in 12 months’ time than it is today, and therefore we are biased toward taking risk. But we are unable to reconcile the the size and speed of the stock market rebound at the beginning of June with what is likely to be a gradual re-opening process and moderate medium-term growth.”
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Just what the doctor ordered
When you’ve got a sore knee, you don’t go see a brain surgeon.
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Markets scenarios & risks - July 2020
We marginally amend the narrative of our central and alternative scenario on the back of recent developments. We also increase
the probability of our central scenario from 50 to 60% while reducing the likelihood of the upside scenario from 30 to 20%. -
White papers
Global Investment Views – July 2020
Covid-19 has triggered a sequence of economic and financial market narratives and is giving way to a new status quo characterised by extreme fiscal and monetary measures, to which markets have responded well, though some volatility has returned in the past few days. In effect, these policy measures are painting a new picture, that of a “day after” renaissance.
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Market weekly – What to expect after the Great Pandemic of 2020 (podcast)
The unprecedented crisis caused by COVID-19 has left asset allocators disorientated. Uncertainty has deepened and the outlook is now for bond and equity returns to be lower for even longer, making the hunt for yield all the more acute for investors.
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White papers
Asset allocation – Dealing with ‘lower for longer’
The unprecedented crisis caused by COVID-19 has left asset allocators disorientated. Uncertainty has deepened and the outlook now is for bond and equity returns to be lower for even longer, making the hunt for yield all the more acute for investors.
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Multi Asset: a solid total portfolio approach for a complex world
An increasing number of institutional investors have adopted a total portfolio approach (TPA) as a response to the weaknesses of more traditional strategic asset allocation (SAA)-based methodologies. We believe the current crisis will reinforce this trend, as it is probably marking a paradigm shift in financial markets. This shift could be as important as the change in US monetary policy brought in by Federal Reserve Chairman Paul Volcker at the beginning of the 1980s, which led to a long period of disinflation, lower interest rates and high asset returns.
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White papers
In the wake of first-quarter reporting season, the consensus is probably still too optimistic
At -12% for the S&P 500 in the US and -35% for the Stoxx 600 in Europe, first-quarter results were hit hard by the pandemic, even though it had hardly begun by the end of the quarter. It is therefore a safe bet that results will be even worse in the second quarter but also that they will bottom out for the year. Even so, the consensus still looks far off the mark for both second-quarter results and for 2020-2021. Consequently, the positive impact from reopening the economy already appears to be priced in by far.