Interview with John Woods: China leads economic recovery
In the race toward economic recovery, China is ahead of other countries. While Europe is also making strides toward normal economic activity by ramping up its vaccination campaigns, the US is lagging behind. The global imbalance is affecting the equity market forecast as well.
Economic recovery in Asia: China responds by picking up the pace
China is looking back on a volatile first quarter. Robust foreign demand resulted in January 2021 in the highest export numbers since everything came to a standstill last year. This upward momentum has been derailed for the time being as production in the automobile industry has ground to a halt due to a worldwide shortage of semiconductors. For the third quarter, by contrast, Credit Suisse expects Chinese economic growth to accelerate once more, driven by strong demand resulting from the long-awaited opening in the West and the steadily recovering economy.
Equity forecast: Risk appetite expected to remain high
Volatility is also being felt on the equity market. The Credit Suisse Investment Committee continues to assume that investors have an increased risk appetite and that there is a risk of market consolidation with heightened volatility. "The most recent weakness in equity markets, coupled with sharp drawdowns in previously buoyant equity segments, supports such concerns," explains John Woods, Regional CIO for APAC at Credit Suisse. Watch the interview with John Woods to learn what strategy the Investment Committee is pursuing when it comes to equity allocation under the current conditions.