Cholet Dupont still cautious in the short term

According to Vincent Guenzi, strategist at Cholet Dupont, “ After worrying for several weeks about the accumulation of bad news, the financial markets recovered as soon as the first encouraging signals appeared. This rapid about-face seems justified by the level of pessimism that had been reached. The rebound will need confirmation of the hoped-for improvements to continue beyond a few days because investors are a little scalded. This scenario still seems feasible to us during the second half of the year, but we do not rule out a return to volatility in the meantime in the event of disappointment. We will therefore wait to be reassured on this point before raising portfolio investment levels. However, we are renewing our advice to use the next episodes of volatility to continue to buy equities on portfolios that are recent or have very little exposure. We have not changed our somewhat cautious recommendations on short-term equities, while the potential for index increases between now and the end of the year remains between 8 and 11%. Events and market developments in May reinforce our belief in achieving this progress. »

In the meantime, this expert anticipates a phase of stabilization of the indices for the next few months. According to him, the sharp decline ended in May, but it will be necessary for improvements to be confirmed for the rise to resume durably. Indeed, a doubt remains on the level of earnings that will be published this year and next year. For now, valuations are neither favorable nor unfavourable, with PERs below their historic average in Europe and approaching it across the Atlantic.

Vincent Guenzi therefore slightly increased his equity exposure to 47.3%. However, it remains slightly underexposed, particularly in European equities. But it remains overweight in the medium term on the latter as well as on Wall Street. In terms of bonds, all asset classes are underweighted in the short and medium term, with the exception of government bonds and highly rated US corporate bonds, where neutrality is required over both periods, and medium-term emerging debt.

Investing opinion

We are also maintaining our neutral position on equities. However, we would recommend reductions with a Cac 40 close to 6,800 points, a threshold that seems difficult to cross over the short term.