The risk of recession, believes the asset manager, has increased in the United States and “particularly” in Europe.
NN Investment Partners moves to ‘underweight’ global equities | Photo credit: Shutterstock
Facing a “growing risk of recession”, NN Investment Partners moved this week to “underweight” global equities. Even though they already have “sharply dropped in recent weeks”until registering in bear market (-20% from their peak), the asset manager fears that they will fall even lower.
The labor market is tight, the conflict in Ukraine “is far from calming down”also, at NN IP, it is believed that “Inflation has not peaked yet. It is therefore difficult for central banks to become less hawkish. And with the drop in the main economic surprise indices, we must be prepared for a marked slowdown in growth. In our view, the risk of recession has increased in the United States and particularly in the euro zone, where the energy crisis is having a major impact on household purchasing power. »
A Lehman Brothers energy
Yesterday, on the observation that Russia had reduced its gas deliveries by 60% via the Nord Stream 1 gas pipeline, Germany activated the “alert level” of its plan to guarantee gas supplies, which brings Europe’s leading economy closer to possible rationing measures. A total cut off of Russian supplies would cause a “Lehman Brothers effect in the energy system”, according to German Economy Minister Robert Habeck.
Currently, according to NN IP, “Corporate earnings forecasts do not adequately reflect the bleak outlook for economic growth. » The accounts at the end of June which will be published this summer will be decisive for the stock market trend.
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