By Abhishek Vishnoi and Hoi Yuet Woo, Bloomberg.
Global equities are edging close to an all-time high, with some analysts forecasting further upside supported by dip-buying activity.
The MSCI All Country World Index is only 0.5% away from surpassing the record close of 887.72 set on February 18. The gauge has rebounded 19% from a low in April after President Donald Trump’s tariff announcement.
“Many investors may have felt left out and are looking for potential corrections in order to deploy the cash,” Massimiliano Bondurri, founder of SGMC Capital said in an interview on Bloomberg TV.
A temporary reprieve for US trading partners from most of the levies is boosting risk-on sentiment as investors seize on market tumbles. Major stock gauges have either erased or pared losses sparked by Trump’s early-April tariff announcement.
The MSCI’s global stock benchmark is set to climb 11% over the next 12 months, based on analyst estimates for its members compiled by Bloomberg. Strategists have also started upgrading allocations to major markets.
Morgan Stanley strategists last month raised their stance on US stocks and Treasuries on expectations that a slew of future interest-rate cuts by the Federal Reserve will support bonds and boost company earnings. Meanwhile, Nomura Holdings strategists upgraded Chinese stocks to a ‘tactical overweight.’
Investors are keeping a close eye on how the China-US trade spat pans out, with the main focus on whether Trump and China’s President Xi Jinping will hold a conversation to dial down the tensions. The two countries have accused each other of violating a trade agreement reached in May.
“It is in both countries’ interest to come up with a constructive solution,” George Maris, chief investment officer and global head of equities at Principal Asset Management, said on Bloomberg TV. “There’s plenty of room for reasonable compromise.”