Our Investment Strategy Recommendations For October

We abandon our negative view on equities in the short term. The stock markets have
been in a consolidation phase for two years (except for the trough in the last quarter of
2018) as fundamentals have been deteriorating: less economic growth expected, profit
increases revised down, political risks still present. The markets are increasingly
pricing in this deterioration and the downside risks are diminished in our opinion.

For the time being, we remain neutral on stock markets in the medium term as we
consider the risk/upside ratio to be unfavourable. If everything goes well, according to
our base-case scenario (moderate economic growth including in the eurozone, little
profit growth in 2019 and 2020, historically very low interest rates and no future shocks
as inflation remains low) stock markets will remain at the year's highs but will struggle
to continue rising due to a lack of catalysts. On the other hand, the risk of a correction
is greater if one of these risks materialises. Conversely, after the interest rate cuts in
the summer, the relative attractiveness of equity markets has increased; aside from
the short-term concerns, equities remain the best asset class for generating positive
returns over the long term.