May 7, 2020 / 8:46 AM / a month ago

Pictet sees more market turbulence ahead, cautious on stocks

LONDON (Reuters) - Pictet Asset Management said on Thursday it remained cautious on equities as more turbulence in markets was likely given the possibility of a second wave of infections from the coronavirus.

“Economic conditions may be easing due to an apparent peak in new coronavirus cases... but there is bound to be more turbulence ahead - not least the possibility of further waves of the virus,” Luca Paolini, chief strategist at Pictet Asset Management, said in a statement sent to media.

World stocks have jumped more than 20%, wiping more than half of the losses incurred due to the virus, as countries slowly ease the strict lockdowns that were in place to contain the spread of the virus.

The asset manager said it remained “neutral” on equities, bonds and cash, and “overweight” on gold.

Given the risks ahead, Paolini said he preferred defensive sectors and upgraded Swiss stocks .SSMI to "overweight".

“Despite their dizzying rally, we continue to be cautious on equities in the near term - markets seem to be overestimating the speed of economic recovery,” he added.

Pictet manages $183 billion in assets.

Reporting by Thyagaraju Adinarayan; Editing by Tommy Reggiori Wilkes

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