Global markets still have unresolved risks, despite a stable first quarter according to Antipodes Partners.
Alison Savas, Antipodes Partners client portfolio manager, said despite the volatility that had emerged in the fourth quarter which had disappeared in first quarter, there were still risks that are unresolved.
“Many of these are what we term ‘known unknowns’, tail risks that we view are multiplying,” Savas said.
“When we think about geopolitical instability, trade wars and corporate credit excesses; these are all building in the system and ultimately are building instability, so we do expect to see more volatility.”
“That’s how we view the market, we can observe it’s becoming unstable, but when it breaks we don’t know.”
Despite a tough 2018 for China, there was optimism growth was emerging after reforms stimulated the Chinese economy.
“Loosening of monetary policy and tax cuts to the tune of one per cent of gross domestic product (GDP) are starting to drive consumption,” Savas said.
“By virtue of that, we feel that will lift up Europe in the same way the slow down in China brought Europe down.”
“We don’t have a negative view on the United States market per se, but certainly we’re more constructive on China and Europe.”
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