Investment outlook: Keeping a balanced view

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The slowdown in China and rising interest rates in the US are a concern, but are not risks to global growth. We believe that the cyclical uplift that is underway in Europe and the US will be strong enough to overcome negative market sentiment. We remain in favour of investing in stocks and commodities.

At a time when the crisis in China is leading many forecasters to revise downward their growth predictions for China, the US, and emerging economies, ABN AMRO is reaffirming its conviction that a cyclical uplift will unfold in the last months of the year, driven by improving consumer demand and an industrial recovery In developed economies. With this view, we stand apart from consensus opinion, and we stand by our conviction in overweight allocations to European and emerging-markets Asian equities.

We believe that the low oil price is already having a negative impact on energy producers and curbing their investments in infrastructure. This lack of investment will progressively erode future supply. In the meantime, lower commodity prices are benefiting consumers, while boosting corporate margins and earnings. A slight economic acceleration, together with central banks acting to spur inflation, will stabilise equities and support credits.

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