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#Market Strategy — 12.02.2019

Our investment strategy recommendations for February by Florent Brones

Florent Bronès

A strong market rally in January

Last month was one of the best months of January in stock market history. The fundamental picture has not changed dramatically, but general sentiment moved from an extremely "oversold" situation at the end of 2018, when pessimism dominated. Some better-than-expected fundamentals (including US employment), a different tone from the Fed in its
communication and some more positive signals from the ongoing negotiations between China and US sufficed.

Our base-case scenario for 2019 remains favourable for risky assets as fundamentals are still solid.We exclude the risk of a recession, including in the eurozone, as domestic demand remains strong. Profits continue to rise, albeit at a slower pace, especially in the United States, as reflected in the revised forecasts earlier in the year. Interest rates are historically low as inflation remains timid. The upward multi-annual trend in stock market is not called into question simply on the basis of the 2018 decline. But volatility will remain higher at the end of this market cycle.

Florent Brones

Chief Investment Officer
BNP Paribas Wealth Management