Key Points
- Lombard Odier’s Woods sees a rotation story from developed markets into emerging markets
- Kepler Cheuvreux’s Philippe Ferreira is seeing opportunities in utilities and telecommunications
- Amundi’s Guy Stear is eyeing opportunities in industrial stocks, because of the AI trend
U.S. futures are pointing lower early Monday, after the S & P 500 and the Nasdaq closed at record highs on Friday. European stocks are mostly lower in today’s trade, as investors watch for signs of progress in Middle East talks, with the FTSE 100 closed for a U.K. Bank Holiday. European auto stocks are under pressure today after President Trump threatened to increase tariffs on imported vehicles from 15% to 25%, effective this week. The news came during trading hours on Friday, but European markets were closed for a public holiday so losses were felt on Monday. Across Asia, China and Japan were closed for public holidays, but South Korea’s Kospi closed at a record high, boosted by Samsung Electronics and SK Hynix. Here are three investment strategies we heard out of CNBC’s Singapore and London studios to help navigate the noise. EM rotation John Woods, CIO and head of investment solutions, Asia at Lombard Odier expects improved investor flows into emerging markets at the expense of developed market peers. “This is the likely thesis that will drive performance in the months and quarters ahead”, he said. Woods, who is overweight Japan, South Korea and China, thinks the recent emerging markets rally still has legs after almost 15 years of the assets being under-owned. “As that liquidity gradually migrates from developed markets boosted by the prospect of a weaker dollar, I think the upside for EM is in place.” Utilities and telecommunications Philippe Ferreira, deputy head of economics and cross-asset strategy at Kepler Cheuvreux, sees opportunities in European utilities and telecommunications. He argues that those sectors are “somewhat isolated from the energy shock”, or in the case of utilities, are “benefiting at the margins.” Ferreira is less keen on consumer discretionary, which he says “will be impacted negatively by high oil prices,” as consumers pull back on spending. Industrial stocks Guy Stear, head of developed markets strategy at Amundi, sees opportunities in industrial stocks as companies embrace artificial intelligence. Stear is also underweight the U.S., which he describes as a “long-term idea.” Stear highlights the volume of industrial stocks across European and Japanese indices, as well as in emerging markets. “It’s really these two areas where we think are the greatest opportunities in terms of gains between now and the end of the year.”
