Filippo Stefanini, head of Multimanager Investments & Unit Linked at Eurizon Capital SGR in Milan, has commented on his stance towards asset classes in light of the upcoming US midterm elections, which take place on 6 November.
“GDP growth is strong, in part thanks to the tax reform, and there are full employment and benign inflation,” Stefanini says.
“The Federal Reserve is normalising interest rates. There is optimism on the US economy. However, there is a strong divergence between the US and the rest of the world both in terms of growth and equity market performances and this cannot last indefinitely. It is like an elastic band that is stretched and could come back.
“Midterm elections on 6 November are a key event because they could change the majorities in either the House of Representatives or the Senate with strong implications for future fiscal policies.
“We remain prudent because we are late in the cycle, and we remain tactical, awaiting the outcome of the elections.
“A stronger dollar, higher US interest rates, trade war rhetoric and tariffs are creating pressure on some emerging markets economies. Hopefully this could fade after 6 November.”