Europe Will Outperform U.S. Markets: Bokobza

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Oct. 10 (Bloomberg) -- Alain Bokobza, Head of Strategy at Societe Generale, discusses the nomination of Yellen for Fed Chair and his subsequent investing strategy. He speaks on Bloomberg Television’s “On The Move.” (Source: Bloomberg)

That she is to dovish.

I think it is important when you are a policy influencing member, to have your political background.

She was one of the most dovish people.

She is going to lead the federal reserve and her role will be to have good economic policy, trying to take the bush -- pudh from the dovish -- the push from the dovish and the hawkish.

What do you make of all the political wrangling?

We understand that we may get some kind of agreement on the debt ceiling.

This delays any kind of tapering and certainly any kind of interest rate rises.

My first reaction is that the governance of the u.s. has to be improved overall.

In order to recover, we are talking governance here.

They need to tackle that problem structurally.

This is the second year in a row they have had this problem.

If they do not agree, the u.s. economy will go into remission.

If they have automatic spending caps can they slight interposition -- into recession.

What does it mean for your portfolio?

You believe that u.s. equities will fall by 15%. when do you expect that to happen?

By the end of the year it is very improbable that the fed will move as the effect on the real economy from other government is doing is probably very bad in the very short-term.

They will delay tapering.

Q1 next year, quite soon.

They will taper and tighten.

After qe1 starts, it could be 16%. after qe2 starts, it could be 17%. i am quite optimistic saying that after qe3, the u.s. equity markets will fall only 15%. but if they fell only 15%, i should cut out my bosses now and get out of u.s. equities.


You should have backing from monetary policies.

That will remain extension array.

It can be eurozone or japan.

They are going to continue.

You like european and japanese equities.

Is there not fundamental problems that we still don't know if the great experiment will work?

If we see a more dovish fed, it will impact the yen and therefore it will impact japanese growth.

I disagree somewhat in the fact that the fed is more dovish.

They have delayed tapering.

As for this debate in washington, on the fiscal policy, there is an interaction.

The more you delay the political decision, the more the economies slope.

You have a delay in tapering.

When they agree on the fiscal side, then the federal reserve will have to normalize.

That is very bullish for the u.s. dollar.

What is your take?

You are bullish on japanese equities.

You also like european equities.

What would you buy in europe right now?

It seems that everything is on track it we could still have a lot of bumps.

Political concerns, the governance has continued to improve lately.

It is important to highlight that europe year to date is about flat against the u.s. european indices are up about 15%. by the end of the year, europe will probably be better than the u.s.. x year, i expect under 15% discrepancy.

You have the start of the european assets taking place.

What do i buy?

Do i focus on some of the -- two ago for italy, spain or to why focus on industries?

Country picking can be very good.

If you say there is a recovery on the way, that is probably france.

They were the only country in the eurozone which started very light.

The cac 40 has a long way to go.

My target is about 7000. despite all the political concerns, we still are concerned about french banks or at least a lot of people are.

We are concerned about bad loans across europe.

Would that not impact equities in general?

There is a plan to recapitalize.

Recapitalization -- it could allow the system to fall.

[indiscernible] it seems that gradually, expectations are warming up.

Thank you so much.

Nice to have an optimistic view about europe.

"on the move stays with -- alain bokobza stays with us.

Coming up, we dig into alitalia.

This text has been automatically generated. It may not be 100% accurate.


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