At Barclays Plc, strategists led by Emmanuel Cau warn stock volatility is set to return, though they still remain positive on the asset class on the potential for earnings to offset faster inflation. The team recommends value stocks -- cheap, typically cyclical names like banks and energy producers that tend to gain along with bond yields.
“As policy makers unwind reflationary measures, growth and liquidity conditions won’t get any better and macro volatility should rise,” the analysts wrote in a Wednesday note. “But we believe final demand will stay firm as both corporates and the consumer are in good shape.”
This article was provided by Bloomberg News.