Anchor Insights April 2022

• The month of March was marked by higher-than-expected inflation. (USA 7.5%, Spain 9.8%).
  
• The American stock market rebounded 3.5%, the European and Asian markets in negative territory.
  
• Economic indicators favorable to the US, Switzerland, and Japan. Europe and China revise down.

• Negative real rates support equities in the medium term. Our central rate hike scenario continues to keep us negative on fixed income. We see more profit from currency decorrelation (EUR & USD).

• We take into account that, with less probability, a prolongation of the conflict in Ukraine and a poor earnings season could imply a potential recession. We are keeping an eye on this, as it would favor long-term fixed income and hurt equities. Monetary in dollar would benefit in this context.

We favor US stocks over European and Asian stocks due to macroeconomic tailwinds. The rate hike will be positive for companies with cash generation, good margins and pricing, so we overweight:

• Technology: it is cheap after the falls since the beginning of the year.

• Health: economic cycle approaching its favors, historically more defensive and with good fundamentals.

• Consumer discretionary: We are positive on services, travel and airlines, ahead of a record summer season.

• Renewables: due to rising energy prices and less dependence on Russia.

We still see little tour.

• We found opportunities in corporates and high yield in dollars, due to the increase in spreads.

• We underweight euro corporate bonds as credit spreads are still very tight.

• Linked to inflation, they already discount a year-on-year price increase of 3.5% over 5 years. We believe that the worst is already discounted, so we begin to reduce exposure.

• Energy and metals at maximum reduce its attractiveness. There is little to gain and much to lose in this category, which is why we began to reduce exposure at the end of March.

• We see the US dollar travel to the 1.08-1.05 range. A conflict resolution in Ukraine would favor the euro, so we started to overweight.

• Inflation and supply problems favor the agri-food sector. We see medium-term growth for these Soft Commodities.