#Market Strategy — 12.09.2018

Video: our investment strategy recommendations for September by Florent Brones

Florent Brones

The bull market over the medium term is not over.

Volatility has remained low over the summer. The US market has significantly outperformed, thanks to good fundamentals in terms of growth, inflation and company earnings. Europe has not followed the same trend because of the risks linked to Brexit, Italy and Turkey. Emerging markets are under pressure.

Volatility in the coming weeks and months is very possible as long as short-lived risks persist: trade tensions between the United States and its partners, China in particular, risk of a Brexit without a UK/EU agreement, risk of an overly accommodative first budget of Italy's new government, risk of contagion in emerging markets, risk of an economic slowdown in China.

In our view, the bull market over the medium term is not over. Our optimism is based on three unchanged fundamental reasons: the rise in company profits in 2018 and 2019, the small rate hikes expected and finally the moderate equity valuations. The US market is expensive compared to historical standards but its valuation is less expensive than a year ago thanks to profit growth. Nothing so far undermines these three solid arguments.

Florent Brones

Chief Investment Officer
BNP Paribas Wealth Management