Much of the decline made, according to Cholet Dupont

According to Vincent Guenzi, strategist at Cholet Dupont, “ June seems to have marked a turning point in the markets. The publication of even higher inflation figures in the United States and Europe led to a very severe reaction from both the American and European central banks. These tensions were transmitted to the credit markets and to the stock markets, which immediately fell by 5% and 10% on average. Indeed, investors have begun to fear that central bank actions will indeed cause a recession more or less quickly. »

This expert, however, does not anticipate a recession in the United States or Europe this year or next year, but he does not exclude one or two quarters of decline in certain European countries such as Germany in the event of a total interruption. Russian gas deliveries. In addition, Chinese growth remains subject to a fragile health situation. From their recent highs, the drop is 20-25%, a percentage close to the average decline of 26% seen on Wall Street since 1945 before each recession. ” That is to say that the indices are beginning to anticipate this well when it is not yet certain. It should be remembered that the markets very often discounted a recession which did not materialize thereafter. Recession or soft landing, the future will tell. But the accumulation of obstacles encourages us to remain vigilant about the economic outlook. »

Towards a final phase of decline?

For the second half, Vincent Guenzi estimates that 10-year yields at 3.5% in the United States are becoming attractive. On equities, a final phase of decline cannot be ruled out due to uncertainties. The return of an upward trend would go through a resolution of the Ukrainian conflict, an unlikely hypothesis, a decline in inflation or a more convincing rebound after the end of the stock market correction which would result in panic selling in high volumes, pessimism extreme and much lower valuations than they are today. In the meantime, the financial centers should remain very hesitant.

This is why Vincent Guenzi remains cautious with an equity exposure of 48%. 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 underweight in the short and medium term, with the exception of US government bonds, where neutrality is required over both periods, and emerging debt in the medium term. .

Investing opinion

We maintain our neutral position on equities. However, we would recommend reinforcements with a Cac 40 back to 5,500 points, a threshold that can be envisaged since the 6,000 points were clearly sunk.