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European stocks head towards all-time highs as Fed fears abate US central bankers allay concerns over withdrawal of pandemic crisis monetary support
Tue, May 18, 2021, 10:43
In Asia, Tokyo’s Topix closed 1.5 per cent higher and Hong Kong’s Hang Seng index added 1.3 per cent.
European equities headed towards all-time highs on Tuesday after US central bankers soothed concerns about the Federal Reserve withdrawing its pandemic crisis monetary support.
The Stoxx 600 index opened 0.7 per cent higher at 445.2 points, close to its closing record of 445.4 on May 10. London’s FTSE 100 added 1 per cent.
An estimate of eurozone GDP growth released later on Tuesday is expected to show that the bloc’s economy contracted 1.8 per cent in the first quarter, year on year. This would put its economic recovery from the pandemic far behind that of the US, which is rebounding strongly.
LONDON: Electric vehicle infrastructure, top-end offices and industrial metals with a resurgence in inflation seemingly on the horizon, investors are slashing their exposure to bonds in favor of “real” assets.
While such investments tend to generate income and often appreciate in value, they are particularly prized as a shield against inflation, which many economists expect will make a return as economies recover from the pandemic.
That means major changes for multi-asset portfolios run along traditional 60-40 lines. Sovereign debt such as US Treasuries and German Bunds has typically accounted for part of a rough 40 percent bond allocation providing an income and acting as an anchor against the lucrative but volatile 60 percent equity component.
Investments get ‘real’ as inflation fears dim appeal of bonds
Electric vehicle infrastructure, top-end offices and industrial metals – with a resurgence in inflation seemingly on the horizon, investors are slashing their exposure to bonds in favour of “real” assets.
While such investments tend to generate income and often appreciate in value, they are particularly prized as a shield against inflation, which many economists expect will make a return as economies recover from the pandemic.
That means major changes for multi-asset portfolios run along traditional 60-40 lines. Sovereign debt such as U.S. Treasuries and German Bunds has typically accounted for part of a rough 40% bond allocation – providing an income and acting as an anchor against the lucrative but volatile 60% equity component.