• In line with our expectations highlighted in our 17th February edition, markets enjoyed broad based gains last week.
• The global macroeconomic backdrop however is not encouraging. Signs are increasing the US will fall into recession in the next 6 to 12 months. Disappointing euro zone PMI data is adding to doubt the region can withstand a global economic slowdown.
• We pare back our net allocation to equities to 25% from 50% by downgrading Europe and Japan to Underweight from Overweight. We also increase the Underweight in US equities.
NOVACAP Asset Management
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