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Global CIO Video: "We remain broadly optimistic toward global growth."

"What goes up must come down." Our economists recently used this phrase to describe the peak in economic activity they expect in coming weeks after a strong rebound this summer.

Yet it applies equally well to technology stocks. August saw a veritable melt-up in that sector, with the S&P 500 and Nasdaq indices hitting fresh all-time highs almost daily, but the early days of September brought about a sudden consolidation driven by profit-taking.

Nevertheless, the technology sector remains an interesting long-term investment, as its structural growth drivers are intact. For the time being, however, we are mindful of the sector's high valuations and weakening momentum.

Watch the new House View video with John Woods, Chief Investment Officer APAC.

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As we discussed in the latest Investment Committee meeting, the correction in technology stocks and the broader equity market may well have been a sign of more volatility and setbacks to come. In our view, a number of risk factors currently warrant caution. In addition to the industrial production peak we expect this month, the highly contested US presidential election and the ongoing COVID-19 pandemic may lead to more meaningful setbacks in equity markets. Moreover, Brexit negotiations are stalling, increasing the risk of a no deal outcome by year-end.

In light of these risks, we retain our neutral allocation to equities in a portfolio context. Overall, we are optimistic toward growth. Our long-term view on stocks remains positive and our positioning moderately pro-cyclical thanks to continued tactical overweight positions in global commodities and credits.

Though the USD consolidated during the market correction, we believe that it will resume its weakening trend.

By accessing the videos and/or podcasts in this page, you hereby consent to Credit Suisse disclosing your full IP address to YouTube and/or SoundCloud for the purpose of enabling you to view or listen to the content hosted in those platforms. These third party platforms are not operated or monitored by Credit Suisse, and your IP address and any other personal data collected, processed or stored by these third party platforms will be subject to their own privacy policies, and Credit Suisse will not be responsible for their treatment of personal data.