Money managers under the microscope
Another sign this year’s huge equity market rally may soon run out of steam.
After Crispin Odey’s warning last month of a pullback — yet to emerge but certainly a possibility according to many hedge fund managers — Majedie Asset Management’s Matthew Smith has sold out of cyclical stocks in case economic growth disappoints.
“If you’re buying cyclicals now you have to take much more of a view on earnings 12 to 24 months out,” he told me.
“If the economic doesn’t recover in line with what everyone expects, some cyclical stocks could be absolutely hammered… Now’s not a good time to put on a lot of risk.”
Some good news for the bulls.
Octopus fund manager David Crawford believes this year’s equity rally could lift the FTSE 100 to the 5,000 mark, from just over 4,600 currently, helped by energy stocks.
The call backs up that from hedge fund manager Crispin Odey, who earlier this year pointed to the start of a new bull market and then recently said there is “every reason to be hopeful that a major correction will not happen before September”.