Global growth is expected to slow down significantly in the coming months as borrowing levels dominate in both China and Europe and "Trump-mania" is set to fade, a chief economist at Danish investment firm Saxo Bank.
"Our main global macro outlook still maintains that recession is more likely than not in the near future (12 to 18 months) based on the global credit impulse having peaked simultaneously with global inflation,"
Europe is seen as the main region driving global growth, according to Jakobsen, beating the U.S. in the second and third quarters of this year. Jakobsen is not alone in this thesis, with a number of investment houses recently upgrading their outlooks on European stocks as fears recede on the rise of populism and polls indicate that centrist candidate Emmanuel Macron is likely to do well at the upcoming French elections.
Mike Bell, global market strategist at JPMorgan Asset Management, told CNBC Monday that European stocks "look pretty cheap" compared to U.S. stocks.
Furthermore, the main driver of U.S. equities seems to be hope, Jacobson added. The S&P 500 has reached historic highs since the new president took office on expectations that he will deliver massive tax cuts and infrastructure investments.
Source: CNBC
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