Italy
Introducing our Special Series to assess where Portugal, Italy, Greece, and Spain stand today. Stay tuned for more.
The global economy will not enjoy an “immaculate disinflation” but will suffer a very maculate one due to China’s growth slowdown and restrictive monetary policy in the developed world. Investors should stay overweight low-beta assets.
Macro and geopolitical risks may spoil the narrow window for a stock market rally before recessionary trends rise to the fore.
The Chinese government will repress social unrest, then relax Covid-19 social restrictions to try to stabilize the economy. Russia will be aggressive in the short term but will pursue a ceasefire before March 2024. European and Italian risk will stay high on energy constraints.
Stay short Greater China assets. Stay long Japanese yen. Hold back on Brazil for now but look forward to opportunities in future.
Russia’s conflict with the West will escalate and trigger more bad news for risky assets this fall. Beyond that, stalemate looms. Latin American equities present a potential opportunity once the macro and geopolitical backdrop improve.
The BoE is the key to arrest the meltdown in UK assets, but will the malaise engulfing London only end up traveling to Rome?
