By Weiyi Lim and Inyoung Hwang
Panic is making an enemy of telephones for Catherine Yeung, the director for equities at Fidelity Investment Management Ltd. in Hong Kong.
“My children hate that BlackBerry,” said Yeung, whose clients have been calling amid two weeks of declines that erased $3 trillion from global stocks. She’s advising calm, noting that profits are rising and shares just got a lot less expensive.
“Being a contrarian and getting in when things seem bad is often a good thing,” she said in an interview today. “The companies we are looking into can still deliver attractive margins. Things are getting cheap.”
Strategists from Goldman Sachs Group Inc. to AMP Capital Investors and JPMorgan Chase & Co. are also telling clients to hang on after losses that began with currencies in Turkey and Argentina spread to developed markets. The Standard & Poor’s 500 Index slid 2.3 percent yesterday, capping its first 5 percent retreat in eight months, while Japan’s Topix index plunged 4.8 percent for its biggest decrease since June.
“We didn’t expect the U.S. would be this weak,” Kathy Matsui, chief Japan strategist for Goldman Sachs in Tokyo, said by e-mail. “Since we do not see sufficient reason to change our fundamental earnings outlook and stock prices have fallen, the market still appears attractive to us.”
Photographer: Diego Giudice/Bloomberg
Argentina’s peso started sliding as the central bank pared dollar sales to preserve... Read More
The American equity gauge rose from a three-month low today, adding 0.9 percent to 1,757.17 as of 1:35 p.m. in New York.
Matsui’s 12-month forecast for the Topix is 1,450, about 27 percent above its level today. The index trades for about 15 times annual profits, close to the lowest in three years after all but 16 of its 1,775 constituents slid, the most since at least 1997. Twenty-one strategists tracked by Bloomberg predict the S&P 500 will reach 1,956 this year, on average, representing an 11 percent increase from its level now.
Forecasts like those did little to prop up shares in the U.S. yesterday after a report showed factory output expanded in January at the weakest pace in eight months and China’s official Purchasing Managers Index decreased to a six-month low as production and orders slowed. Signs of a weakening recovery come as the U.S. Federal Reserve affirms plans to cut stimulus that has propelled a 160 percent rally in the S&P 500 since 2009.
More article at link: http://www.bloomberg.com/news/2014-02-04/goldman-to-fidelity-call-for-calm-after-global-stock-wipeout.html