What bubble? Asset managers in risk-on mode stick with stocks
View original at finance.yahoo.comWhat bubble? Asset managers in risk-on mode stick with stocks (Bloomberg) — There’s a time when investments run their course and the prudent move is to cash out…
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Any geopolitical situation affecting oil price, particularly Middle East and Ukraine/Russia situations, will have largest impact on financial markets
80% confidenceUS has high-return high-growth companies reflected in valuations, but more interesting opportunities exist outside US
80% confidenceCannot call tech a bubble when companies are delivering massive earnings beats, with tech earnings outstripping all other US stocks
80% confidenceDoes not believe there will be a rebound in European auto sector
80% confidenceConcerned that everyone being risk-on creates concentration of positions with less tolerance for adverse surprises
80% confidenceMore than three-quarters of 39 interviewed asset allocators were positioning portfolios for risk-on environment through 2026
80% confidencePlaying powerful trends in place and bullish through end of next year, not taking contrarian position
80% confidenceSees improvements outside US including governance reform in Japan, capital discipline in Europe, and recovering profitability in emerging markets that will mandate allocations
80% confidenceExpectation of solid growth and easier monetary and fiscal policies supports a risk-on tilt in multi-asset portfolios with overweight stocks and credit
80% confidenceIndia has real potential to become Korea-like re-rating story of 2026, transitioning from tactical allocation to strategic core exposure in global portfolios
80% confidence85% of managers said valuations among Magnificent Seven and AI heavyweights are not overly inflated
80% confidenceScenario where US inflation rebounds in 2026 would constitute double whammy for multi-asset funds penalizing both stocks and bonds, worse than economic slowdown
80% confidenceHealthcare sectors can surprise to upside in US markets due to mid-term election year policy support, attractive valuations with catch-up potential
80% confidenceInvestors headed for 2026 need to have the Fed on their side
80% confidenceExpects earnings growth of more than 20% for US small caps after years of underperformance
80% confidenceMeaningful broadening of earnings momentum across market caps and regions including Japan, Taiwan, and South Korea, with potential for earnings growth revival in Europe and emerging markets in 2026
80% confidenceEarnings outlook brightened for small-cap stocks, industrials and financials, with small-caps and industrials benefiting from Fed rate cuts reducing debt servicing costs
80% confidenceAmerican exceptionalism is far from dead and US will be key participant as AI spreads globally
80% confidenceRecommends starting year with sufficient or over-exposure to equities, predominantly in emerging market equities, with no expectation of recession in 2026
80% confidence
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