The official blog of BNP Paribas Asset Management

Asset allocation video – Long Covid

Headwinds ahead: Worsening supply chain and labour market bottlenecks have slowed the recovery and the impact of the virus has lingered. Consequently, expectations for eurozone and US GDP growth in the short run have fallen, while inflation expectations have risen and markets have had to adjust their views on what central banks are likely to deliver.  

In the near term, we worry that confidence in the growth outlook will wane, particularly given the weakness in China, ‘stagflation risk’ and ‘margins squeeze’ concerns. With equity markets near all-time highs, we see more potential headwinds than tailwinds ahead.

Watch our monthly asset allocation video with Chief market strategist Daniel Morris for more analysis and our positioning in the various asset classes.  

Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice.

The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.

Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).

Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.

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