The dollar will continue its decline at a “gentle rate,” the Nikkei 225 should be avoided, and the food sector is well-placed to join the mining industry and move the markets, Robin Griffiths from Cazenove Capital told CNBC Monday.
“The dollar is negatively correlated to everything else,” he said, adding that since we are in the “supposedly strong season for equity markets,” the dollar index will “continue down at this moderately gentle rate.”
During this strong season for stocks, Griffiths suggests investing in emerging markets and ranked India, China, and Brazil at the top of his review of 40 international markets for strength; at the bottom of this list is Japan.
“In spite of it being at bummed out levels and supposedly cheap, the Nikkei remains resolutely in 40th position as actually the one to avoid relative to all the others,” he said, adding that the Nikkei is “still making a patent of falling highs and lows and it basically, technically says ‘avoid.’”
The Japanese stock market was closed Monday for the Labor Thanksgiving Day.
Stock market strength was largely “on the backs of miners and banks alone,” Griffiths said, adding that now that “we’ve lost the banks substantially,” another sector, “big enough to drive the market,” needs to join the miners.
“The high-street is a good place to be,” he said, adding that the food sector, more specifically Marks & Spencers could be “ready to come to life” with an added push by the announcement of Marc Bolland as the company’s CEO.