Salient to Investors:
Markus Rosgen and Yue Hin Pong at Citigroup said EPFR Global reported stock funds this week had their second-largest weekly inflows in 2012 and more than the inflows into bond funds, while US funds reversed an outflow trend and Asia attracted the second-largest inflows this year.
Pong said most economic data have positively surprised, and more people are starting to believe the US fiscal cliff may turn out to be ok. Pong said it would take more time for equities to gain full speed against bonds given lingering issues in Europe and weak global trade.
Global investors say the world economy is in its best shape in 18 months
Strategists at three of the world’s biggest banks are advising investors to buy Asian equities most tied to economic growth after valuations fell and the global economy showed signs of recovery.
Niall MacLeod at UBS predicts technology, industrial and materials stocks will climb in 2013 as China’s expansion accelerates and fiscal-cliff concerns fade. Jonathan Garner at Morgan Stanley said valuations for cyclical shares are 40 percent lower than defensive equities, including household-products makers. Rosgen said an improving earnings outlook will help lure investors.