EFTA01458000.pdf

eke muttons rec.• The 5y ectues tv lefjed, Maeda% pnpnthes PorliOho iigivvirmcwo Wee Investment traffic lights ties* Regions Our tactical and strategic view United States • Europe • F Eurozone *Eurozone (equities) Germany F While we stay neutral on Europe. we upgrade the Eurozone to United Kingdom • F overweight. The danger of a "Grexit- appears to have passed its Japan • A peak so that investors can again focus on corporate data which should benefit from accelerating domestic consumption. Emerging markets • A Asia ex Japan *Germany (equities) Latin America • NI r÷.2,U4 G)I!. Although German equities stand to benefit from several factors, Consumer staples • the composition of the DAX is not optimal in the current environment. Car makers could be hit by sluggish Chinese Healthcare demand, while industrials and chemicals will see a fall in • Telecommunications investment Utilities • •d r— Consumer discretionary • *Asia ex Japan (equities) chee)ra °Melt, Energy • Rapidly falling prices on the Shanghai and Shenzen exchanges Financials • in June and July prompted government countermeasures. The Industrials impact on the economy should be limited in our view. Equities will remain volatile but cheaply valued H-shares could offer Information technology • good opportunities in the months to come. Materials • Style 0 Healthcare (equities) Small and mid cap • rtcr: ie e. Pricing power, mergers and acquisitions and an ageing 'as of 7/15/15 society will support the sector in the long run. But it has now outperformed the market for four years and is valued accordingly so that we do not upgrade it beyond neutral. ()German Bunds (10-year) •• As for most bonds we also expect Bunds to swing back and (D Industrials (equities) forth in a trading range for the time being, offering short-term Ct opportunities. Such as going tactically underweight. Low prices for oil and other commodities as well as economic adjustment in China are contributing to the current fall in investment, burdening industrials - more so in Europe than in 0 U.S. investment grade a'• n 'ArM the. United States. We downgrade U.S. corporates to underweight. The market tends to dry out during the summer holiday season, increasing ()U.S. Treasuries (10-year) possible volatility, particularly since banks cut back on their trading activities. Additional burdens are a full issuance We are neutral on all U.S. Treasury maturities. Although we still calendar and the impending Fed hike. believe that there will be an acceleration in economic growth In the second half of the year, the signals on the timing of the first Refer to page 9 for the traffic lights key. interest-rate move by the Fed remain ambiguous. A December start looks increasingly possible. ra t=iteenme Ce.)1/4* Ammaa. 611.)eI A:taixe 7015 CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) DB-SDNY-0117747 CONFIDENTIAL SDNY_GM_00263931 EFTA01458000