Talking Heads

Inflation has bounced back vigorously from its pandemic-era lows: The headline rate for the US consumer price index has reached a 40-year high, while in the eurozone, the headline rate for the harmonised index of consumer prices is at its highest in 20 years. What does this mean for investors? Hosted on Ausha. See ausha.co/privacy-policy for more information.

To help multi-asset portfolios cope with the geopolitical shock of Russia’s invasion of Ukraine, a move into cash can be useful. At BNP Paribas Asset Management, we have implemented such an approach to ride the recent market volatility and use bounces to sell assets whose fortunes have now changed and build or expand other, more defensive positions at attractive prices. Hosted on Ausha. See ausha.co/privacy-policy for more information.

Global bond markets already faced challenging times before the conflict in Ukraine, but they at least had a clear expectation to work with: the prospect of firm central bank action to tackle rising inflation. Geopolitical developments have upended the calculus, undermining inflation and growth forecasts and weakening the fundamentals across the board for the foreseeable future. Hosted on Ausha. See ausha.co/privacy-policy for more information.

Global markets have seen wide swings as concerns over tighter supplies and crimped trade in the wake of Russia’s invasion of Ukraine caused investors to head for safe havens away from risk assets. However, Guy Davies, chief investment officer for fundamental active equities, advises against impulsive action and argues for a focus on cash flows when picking promising stocks.  For more insights, visit Investors’ Corner at https://investors-corner.bnpparibas-am.com/. Hosted on Ausha. See ausha.co/privacy-policy for more information.

Heightened market volatility and uncertainty over the pace at which the ECB will unwind its bond purchases are the main tests investors in European corporate bonds have to contend with currently. Mitigating factors such as robust earnings, strong cash positions and low defaults could be negated by concerns the central bank might need to take tougher action to contain inflation. Hosted on Ausha. See ausha.co/privacy-policy for more information.

Investing in water-related stocks means tapping into a multi-decade opportunity for growth and innovation. Demand in this segment stretches across the breadth of the economy – from tackling ageing water infrastructure to ensuring healthy drinking water and efficient waste water treatment. Hosted on Ausha. See ausha.co/privacy-policy for more information.

Chinese equities look well set to confront the challenges that Omicron, stricter regulation and moderating growth will bring. Revised earnings expectations and valuations mean their  second-half prospects are brighter. Looser fiscal and monetary policies have the potential to provide a further uplift for sentiment. Hosted on Ausha. See ausha.co/privacy-policy for more information.

In a contrarian call, our emerging market debt team sees appealing opportunities in EM bonds. Specifically in those markets where inflation is likely to peak ahead of developed markets in which investors are having to adjust to the prospect of higher real yields. EM segments that were oversold late last year also represent areas worth investor attention as a recovery takes hold. Hosted on Ausha. See ausha.co/privacy-policy for more information.

Our Environmental Strategies Group talk to businesses that, regardless of their size, are making a big impact. In the first of this series we speak to John Berger, CEO of Sunnova Energy International, a residential solar and energy storage company, about the energy transition and the role investors can play in fighting climate change.   Hosted on Ausha. See ausha.co/privacy-policy for more information.

The prospect of a momentous pivot in US monetary policy with gradual withdrawal of the generous provision of liquidity has left markets pondering over valuations. Investors face a challenging year in which they will need to search for assets suited to a new inflationary regime. On our Talking heads podcast, Daniel Morris, chief market strategist, and Andrew Craig, co-head of the Investment Insights centre, discuss the outlook for fixed income, the promise of emerging market debt (and currencies), the prospects for corporate bonds, and the areas of – longer-term – interest once equity valuations have normalised. Hosted on Ausha. See ausha.co/privacy-policy for more information.