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    American inflation reassured investors // Investments in US stocks are growing

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    In August, the expectations of international investors regarding the outlook for the global economy improved markedly. This was facilitated by the latest data on inflation in the US, which reduced the risks of an aggressive tightening of the US Federal Reserve’s monetary policy. Against this background, the share of cash in funds decreased and investments in US stocks increased.

    The August survey of portfolio managers by Bank of America indicates an improvement in investor expectations regarding the fate of the global economy. Representatives of 284 funds with total assets of $836 billion took part in the survey. The number of managers who are confident that the global economic growth will slow down in the next 12 months exceeded by 67% the number of those who continue to expect the pace to pick up. In the previous four months, the number of pessimists has been steadily growing.

    The July data on US inflation contributed to the improvement in investor sentiment. As a result of the past month, the growth rate of consumer prices decreased from 9.1% year-on-year in June to 8.5%. Added optimism to managers and other macroeconomic data in the US. “The latest labor market performance in the US turned out to be quite good, despite all the challenges that the global economy is currently facing,” said Konstantin Asaturov, Managing Director of Equities at Sistema Capital.

    The publication of positive price statistics strengthened expectations of softer actions from the Fed. According to the survey, only 16% called this risk a key one for the global economy, although back in May it was more than 40%. “The global market is now in a phase of recession, which will gradually move into the phase of the financial crisis. The only thing that can slow down this transition is stimulating the economy through monetary policy easing by the Fed,” says Elena Mikhailova, head of analytics and research at Accent Capital.

    However, the fear of high prices has not yet passed . 39% of managers told BofA that uncontrolled price growth is a key risk for the global economy on a 12-month horizon. Managers are concerned about the still difficult situation in the energy market. Thus, Gazprom does not rule out that in winter gas prices in Europe may rise above $4,000 per 1,000 cubic meters. “There are risks that, due to high energy prices, important industries, in particular in Europe, will be suspended, which will create deficits in the respective markets, and this threatens to accelerate inflation again,” notes Mr. Asaturov.

    At the same time, managers reduced the share of cash in their portfolios. It fell from 6.1% to 5.7% over the month, but remains well above the long-term average of 4.8%, according to the BofA survey. But not many managers are ready to increase investments in shares in the current conditions. The number of portfolios in which such investments were below the indicative level was 26% higher than the number of those in which this share was higher. Over the month, the indicator fell by 18 percentage points.

    Recovery of demand is observed only in the US stock market. According to BofA, the number of managers with a share of such securities in the portfolio above the indicative level was 10% higher than the number of those who had this indicator below. In July there were 5% more sellers. “American assets, both stocks and bonds, are the best option for investors from all over the world to place funds in crisis conditions,” says Maksim Vasilyev, chief analyst at Trinfico Management Company.

    At the same time, aggressive sales of shares continue on the European market. European equity fund clients have withdrawn $13.3 billion over the past four weeks, according to Emerging Portfolio Fund Research. UFG Wealth Management Sergei Belyaev.

    At the same time, external stimuli have almost no effect on the Russian market due to its isolation, as Maxim Vasiliev notes. But even in such conditions, it still depends on the main trends in the global economy. Risks of stagnation and, accordingly, a revision of the level of demand for raw materials, Mr. Vasiliev believes, may have a serious impact on commodity quotes, which, in turn, will affect the shares of Russian mining companies.

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