We favour price setters and switch to quality plays to rise above the inflation
Chief Investment Office1 Jul 2022
The persistence of strong commodity prices and supply chain pressure suggest that inflationary pressure (and by extension, elevated bond yields) may linger in the coming quarters. As 2022 pans out to be a watershed moment for global risk assets with equities and bonds both falling in tandem, we lay down the headwinds confronting markets and peruse the roadmap ahead.
- High commodity prices and persistent supply chain pressure suggest inflation and elevated bond yields may linger in coming quarters
- It is prudent for investors to construct resilient portfolios including price setters and quality plays
- Risk-reward for US Tech looks attractive; Unlike the Dot-Com era, the Tech sector today is backed by robust earnings
- Bullish on China; Recent developments suggest the three “C” drivers of Cheap, Clarity, and Catalysts have been attained
- From a cross-assets perspective, we maintain preference for equities over bonds; stay invested in quality plays and upgrade Japan to Overweight
Risk-reward for US Technology looking attractive
Source: Bloomberg, DBS