Pictet Raises Equities Exposure, Cuts Cash

Editorial Staff

21 July 2024

Pictet Asset Management has taken a bullish turn towards equities, raising its exposure to “overweight.” It has cut cash to “underweight,” arguing that slowing inflation and resilient growth suggest that the world economy can avoid a “hard landing”.

The organisation, part of Geneva-headquartered inflation to start falling again in response to weakness in the economy. This is already being reflected in softening inflation expectations. Easing price pressures will, in turn, give the Bank of England the room to start its easing cycle and cut rates before any other of the developed world’s major central banks,” it continued.

Pictet AM remains overweight US Treasury bonds; it predicts their yields will drop another 20 basis points by the end of 2024. “At the moment, there’s too much optimism about how fast and deeply the Fed will cut interest rates this year, but at some point later in 2024 we expect the turn in the interest rate cycle to give US government debt a further fillip.”

The Pictet note came out after US non-farm payrolls for January rose 353,000, handily beating analysts’ forecasts and denting expectations of a rate cut by the US Federal Reserve in the next few months.