According to the chief investment officer of asset management firm Antipodes Partners, too loose monetary and fiscal policy during the Covid-19 period is a “mistake”. Jacob Mitchell told CNBC’s “Street Signs Europe” on Friday that he expects central banks to return to “aggressive policy easing” within 12 to 18 months in response to the economic downturn. The recession will hit most major economies. “Mathematically, it is quite certain that inflation must fall,” he said. However, I think we’re probably in a different regime, where we have to anticipate greater volatility not only around inflation but also economic growth.” Mitchell continued: “When you look at S&P earnings today, most analysts are still forecasting growth next year, which is surprising since we’ll most likely be in the middle of a recession. quit.” “You tend to get, with inflation a bit tougher and more volatile, you’re also going to have big changes in operating leverage. The rise in prices, which we had during Covid, and the downturn declines during a recession, so we think there’s quite a bit of downside on the S&P EPS [earnings per share] the numbers.” Mitchell said he believes the headwind for growth stocks from normalizing real interest rates may have passed, and shares some of the “sustained growth businesses” he’s picking up These include an enterprise resource planning team, or ERP, software names like Oracle and SAP.” They adopted much earlier, let’s call it a process. transition to the cloud, compared to companies like Salesforce, the main office. So the back office will get that growth later, in fact right now. So I think that’s a more interesting place,” he said. The company also invests in more cyclical businesses in the industrials and materials sectors, which he said have been priced to lower hardcore in Europe, but not yet in the US That includes Siemens, Although a recession is widely expected in Germany plans to move into both renewable and renewable energy, and said it has reorganized its portfolio towards more defensive growth assets, both factory automation and decarbonisation. related to supply chain restructuring. It’s really rebuilding the entire global auto industry, moving it to electric vehicles. So a lot of investment is needed, and I think that’s it. Siemens benefits from that,” he said.
