For BlackRock, it’s better to focus on Asia. More bonds than shares – Corriere.it

Don’t trust the stock markets, prefer Asia to Europe and the United States, focus on bonds but not on long-term maturities. I’m BlackRock’s 2023 investment advice which gives a recession in Europe as certain, It is probable in the USA that inflation will remain high, albeit slowing down, and with which central banks will have to live by refusing to raise rates again so as not to depress the economies too much. Fed and ECB will stop raising interest rates in the first quarter and will not cut them in the course of 2023 with the expected peak at 5% in the US and 2.75% in the eurozone” he reports Bruno Rovelli, Chief investment strategist for Italy of the global savings giant at the presentation of the Global Outlook in the Milan offices.

We are underweight equities, consensus expects earnings that seem too high to us. The market also estimates a higher central bank pivot than we estimate, Rovelli explained. We prefer Japan, China and emerging countries. They have less rise in inflation, their central banks tightened rates earlier, he continued, also recalling the expected growth of the Chinese economy with the farewell of the covid restrictions. Globally BlackRock sees corporate investment grade bonds well, where we are overweight. However, we are underweight in the long-term parts of the curve, neutral on the short-term ones. And we find more value in public markets than in private ones.

BlackRock, the global savings giant, he is not afraid of a significant widening of the Btp-Bund spread in the coming months. Italy has outperformed Europe two years in a row and I see no reason to think it can continue. The negative impact of the rise in interest rates will also be felt in Italy, said Bruno Rovelli, Chief Investment Strategist of BlackRock Italia, speaking of our country’s markets during the presentation of the global outlook for 2023. The spread margins seem to me tight but I don’t see a scenario of significant widening, he added when asked about the forecasts for government bonds.
With regard to the ten-year Italian bond, Rovelli observed that we are heading towards a tightening of the ECB budget in a phase in which the public debt is still very high. The country will have difficulty with the maneuvers implemented so far to “immunise” consumers and businesses for a long time against the rise in energy prices and therefore sensitive like the rest of Europe to the energy shock. A wider spread than current levels is to be expected but the percentage of government bonds held by non-residents is low and therefore it is difficult to construct a very negative scenarioconcluded Rovati, explaining that there cannot be a flight of foreign investors in the face of an economic deterioration because they are not positioned on the Btp, which are mainly in the hands of Italians.