Source: Caixin.
BNP Paribas said that the US stock market remains in the best position in 2024, which is a stable bet. Since the end of 2022, the bank has increased its shareholding of Chinese stocks for the first time. They also closed their long position in copper last month, claiming that investors had excessive exposures, but they said the bullish momentum for gold still exists.
According to Société Générale SA's latest report, although the U.S. stock market is still in the "best position" in 2024, it is a stable bet, investors need to start expanding investment scope, and increase opportunities in other asset areas.
Led by Alain Bokobza, the bank's strategist wrote in the report that since June last year, the bank has had a large exposure to U.S. stocks, accounting for 30% of its total investment portfolio. The general direction of their latest strategy has not changed, but they have added more emerging market stocks globally, including the first increase in holdings of Chinese stocks since the end of 2022, while reducing their holding positions in Japanese stocks.
Compared with the Standard & Poor's 500 Index's 2023 return rate (24%), many large banks on Wall Street were relatively conservative in their predictions at the beginning of this year. However, with the index having risen more than 15% so far this year, they have been raising their expectations. Société Générale Bank of France raised its target price to 5,500 points in March, a little lower than Wall Street's widespread expectation, but still higher than the current figure. The highest target price announced on Wall street has reached 6000 points.
In addition to the U.S. stock market, European stocks have also caught the attention of the Société Générale team. Bank strategists at Société Générale said, "Please note that if it weren't for the uncertainty of the French elections, we would greatly increase our exposure to European stock markets."
Against the backdrop of generally optimistic European stock market performance this year, the French CAC 40 index has risen only 0.6%. In the EU parliamentary elections earlier this month, the party led by French President Emmanuel Macron was crushed by far-right opponents, prompting him to dissolve the French National Assembly and hold parliamentary elections in advance.
Therefore, Société Générale's strategists have raised their rating on European small-cap stocks from sell to neutral and are shorting U.S. small-cap stocks to take advantage of "different central bank policies." In other respects, the bank is increasing its exposure to British bonds as market expectations for the Bank of England to cut interest rates soon rise.
In addition to stocks, the bank is shrinking its fixed-income exposure, avoiding sovereign bonds, and beginning to reallocate cash to corporate bonds, while expanding its investment scope to high-yield bonds. As for commodities, Bokobza and his team recommend taking profits on oil - so far this year, the global benchmark Brent crude oil price has risen more than 10%. Earlier this month, OPEC and its allies announced that voluntary production cuts would begin to be phased out later this year.
Finally, Société Générale's strategist last month closed out its long position in copper, saying that investors were overexposed, but noting that bullish momentum for gold "remains."
In the commodity market, Bokobza and his team suggest taking profits in oil - the global benchmark Brent crude oil prices have risen more than 10% so far this year. Earlier this month, OPEC and its allies announced that voluntary production cuts would begin to be phased out later this year.
Finally, the strategist at BNP Paribas also closed his bullish position in copper last month, citing investors' excessive exposure, but said the upward momentum in gold still exists.
Editor/tolk