Investment management – Weekly meeting – 26/01/2016

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Mr. Draghi has not taken any practical decisions during last week ECB meeting apart to repeat that he owns larger potential instruments that he could activate in case of need. It was not enough to convince the markets but oil soared more than 14% (probably coming from short covering) and with this news, the market stayed a very short time on the rise with two positive seances.

In this context of high volatility we think that the market might not be at his bottom. Actually there are no apparent drivers who can bull the market. We do not see for the moment how a sustainable recovery could be generated. On the top of all the fundamentals, all the technical aspects are broken, in particularly in Japan and Emerging Markets who continue to tumble.

Currently we do not see real recession signs in the US: good employment rates, Case Shiller index doing well and good retail indicators. We consider that if we have a global recession Europe will suffer much more than the US markets, due to different recovery level between the two economies.

In short, we believe that 2016 will be very volatile and with a limited visibility, we have decided to continue to reduce the exposure and increase the alternative strategies range.

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Investment Committee

Investment Committee

NOVACAP Asset Management

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