'Analysts underestimating European recovery'
Bob Parker, Senior Advisor at Credit Suisse, says a main theme this year is to be long on European equities. He believes we will see more investors taking profits in the US, and that "analysts are underestimating the European recovery."
With recent data from Spain and Italy being very strong -- while France's figures raise questions – Parker says the early year European equity out performance will continue, with periphery Europe set to outperform the core. "European stocks could easily be up 10-15 percent by the end of 2014," states Parker.
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On top of that, Parker thinks emerging markets will capture even more of our attention this year. At the moment, investors have lost confidence in emerging markets, with many closing their equity and currency positions. But later on in the year, Parker believes, there will be a huge opportunity to go back into emerging markets, which now are very cheap.
Apart from Europe, Parker advises to stay long Japanese stocks. Also, given the possibility of further Fed tapering, Parker says to go long the US dollar and credit risk. Industrial metals will be a good play on the strengthening global economy, but he says go short energy due to increasing supplies.