ECONOMIC & INVESTMENT OUTLOOK - 2019 #BNPPFOUTLOOK @KOENDELEUS @PGIJSELS - BNP PARIBAS FORTIS
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ECONOMIC & INVESTMENT OUTLOOK
2019
#BNPPFOutlook
@KoenDeLeus
@pgijsels
BNP Paribas Fortis, 7 December 2018
Koen De Leus, Chief Economist, & Philippe Gijsels, Chief Strategy Officer
AGENDA #BNPPFOutlook
CHAPTER I
MACRO-ECONOMIC OVERVIEW
KOEN DE LEUS
Chief Economist
@KoenDeLeus
CHAPTER II
INVESTMENT STRATEGY
PHILIPPE GIJSELS
Chief Strategy Officer
@pgijsels
Economic & Investment Outlook 2
OUR OUTLOOK
INTEREST RATES GDP GROWTH BRENT OIL EUR/USD
(EOP) (YOY) (US$) (E.O.P.)
2018 2019 2020 2018 2019 2020 2018 2019 2018 2019 2020
Fed funds 2.25-2.50 2.75-3.00 2.75-3.00 USA 2.9 2.1 1.5 BRENT OIL (US$) 76 65 EUR/USD (e.o.p.) 1.13 1.25 1.34
US-10Y 3.20 3.50 3.25 CHINA 6.6 6.2 6.0
ECB refi rate 0.00 0.00 0.20 Eurozone 1.9 1.4 1.2
GE. 10Y 0.55 1.00 0.90 Belgium 1.5 1.3 1.2
BE 10Y 0.90 1.25 1.15
Economic & Investment Outlook 3
CHAPTER I
MACRO - ECONOMIC OVERVIEW #BNPPFOutlook
1 2 3
MACRO-ECONOMIC VIEW: RISKS MONETARY POLICY
SOLID IN THE SHORT TERM, A. BREXIT
CHALLENGING IN 2019 B. TRADE WAR
A. EUROPE AND US C. CHINA’S CHANGING
B. BELGIUM GROWTH MODEL
1.MACRO-ECONOMIC VIEW: #BNPPFOutlook
SOLID IN THE SHORT TERM, CHALLENGING IN 2019
A/ EUROPE AND US
IS THE END OF THE CYCLE NEAR?
INSTITUTE FOR ECONOMIC RESEARCH (IFO) EXPECTATION (STANDARDISED)
3
2
1
0
-1
-2
-3
1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019
OVERALL WORLD ECONOMY. PRESENT SITUATION OVERALL WORLD ECONOMY IN THE NEXT 6 MONTHS (2Q LAG)
Economic & Investment Outlook 6
UNEMPLOYMENT SHRINKING, CONSUMPTION STRONG
% NON ACCELERATING INFLATION RATE OF UNEMPLOYMENT (NAIRU) AND UNEMPLOYMENT RATE USA – GERMANY
12
11
10
9
8
7
6
5
4
3
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020
UNITED STATES, UNITED STATES, GERMANY, GERMANY,
UNEMPLOYMENT NAIRU UNEMPLOYMENT NAIRU
Economic & Investment Outlook 7
DIVERGENCE BETWEEN EUROPE AND US
% INDUSTRIAL PRODUCTION GROWTH: DIVERGENCE
6
5
4
3
2
1
0
-1
-2
-3
-4
jan apr jul oct jan apr jul oct jan apr jul oct jan apr jul oct jan
2015 2016 2017 2018 2019
EU28 [% 1 YEAR] US [% 1 YEAR]
Economic & Investment Outlook 8
CAPITAL EXPENDITURE (CAPEX): POLITICAL UNCERTAINTIES
EURO AREA GROSS FIXED CAPITAL FORMATION AS % OF GDP
%
24,5
24,0
23,5
23,0
22,5
22,0
21,5
21,0
20,5
20,0
19,5
19,0
1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Economic & Investment Outlook 9
1.MACRO-ECONOMIC VIEW:
SYNCHRONIZED SLOWDOWN #BNPPFOutlook
B/ BELGIUMBELGIUM: STEADY GROWTH
4%
3%
2%
GDP (volume growth, yoy%)
1%
0%
-1%
-2%
-3%
-4%
-5%
2009 2011 2013 2015 2017 2019
ACTUALS OUTLOOK
Economic & Investment Outlook 11DECOMPOSING THE TREND
GDP
GDP
POPULATION POPULATION
GDP HOURS WORKED # WORKERS 18-65 YR OLD
HOURS WORKED WORKER 18-65 YR OLD TOTAL
POPULATION
Economic & Investment Outlook 12DECOMPOSING THE TREND
GDP
GDP
POPULATION POPULATION
GDP HOURS WORKED # WORKERS 18-65 YR OLD
HOURS WORKED WORKER 18-65 YR OLD TOTAL
POPULATION
Economic & Investment Outlook 13CREATING JOBS, BUT WHO WILL FILL THEM IN?
VACANCY RATE CREEPING UP IN BELGIUM
5.0%
( Job openings / total jobs,1 year moving average)
4.5%
Vacancy rate in business economy (B-N)
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
2010 2011 2012 2013 2014 2015 2016 2017
EURO AREA NETHERLANDS FRANCE GERMANY BELGIUM
Economic & Investment Outlook 15EMPLOYMENT RATE: ACTUAL VERSUS AMBITION
EMPLOYMENT RATE %
20 to 64 years; 1 year moving average
80,0
77,5
75,0
72,5
70,0
67,5
65,0
62,5
2000 2005 2010 2015
EU 28 NETHERLANDS FRANCE GERMANY BELGIUM AMBITION
Economic & Investment Outlook 1615
25
35
0
%
5
10
20
30
40
LITHUANIA
LATVIA
BULGARIA
SLOVAKIA
CYPRUS
ESTONIA
SWEDEN
GREECE
MALTA
PORTUGAL
BELGIUM
11th
UK
aged 15 to 19, 2009
HUNGARY
IRELAND
FRANCE
ITALY
LUXEMBOURG
AUSTRIA
STUDENTS IN APPRENTICESHIPS AS A PERCENTAGE OF POPULATION
DENMARK
GERMANY
15
25
35
45
55
65
0
70
5
10
20
30
40
50
%
60
GERMANY
AUSTRIA
NETHERLQNDS
APPRENTICESHIPS VS. YOUTH UNEMPLOYMENT
DENMARK
MALTA
UNITED STATES
FINLAND
ESTONIA
LUXEMBOURG
CZECH REP.
U.K.
LATVIA
BELGIUM
13th
SWEDEN
ROMANIA
Economic & Investment Outlook
EU 27
SLOVENIA
LITHUANIA
aged 15 to 24, 2012 Q4
FRANCE
YOUTH EMPLOYMENT RATES
HUNGARY
POLAND
POLAND
IRELAND
BULGARIA
CYPRUS
SLOVAKIA
ITALY
17
PORTUGAL
SPAIN
GREECEBELGIUM: NO SIGNS OF UBERISATION YET
LABOUR MARKET TRENDS
(% of the total number of employees)
30%
25%
20%
15%
10%
5%
0%
1992 1997 2002 2007 2012
TEMPORARY WORK PART TIME WORK FLEX WORK
Economic & Investment Outlook 18HIRING AND FIRING PRACTISES FLEXIBILITY OF WAGE DETERMINATION
IN YOUR COUNTRY, TO WHAT EXTENT DO REGULATIONS ALLOW FLEXIBLE HIRING AND FIRING OF WORKERS? IN YOUR COUNTRY, HOW ARE WAGES GENERALLY SET?
[1 = NOT AT ALL; 7 = TO A GREAT EXTENT] [1 = BY A CENTRALIZED BARGAINING PROCESS; 7 = BY EACH INDIVIDUAL COMPANY]
7 7 Ranked:
6 Ranked: 6
5 5 106/140
4
115/140 4
3 3
2 2
1 1
0 0
HONG KONG SAR SWITZERLAND UNITED STATES SINGAPORE ICELAND BELGIUM HONG KONG SAR ESTONIA UGANDA SINGAPORE LITHUANIA BELGIUM
INTERNAL LABOUR MOBILITY LABOUR TAX RATE
IN YOUR COUNTRY, TO WHAT EXTENT DO PEOPLE MOVE TO OTHER PARTS OF THE COUNTRY THE AMOUNT OF LABOUR TAXES AND SOCIAL CONTRIBUTIONS PAID BY
FOR PROFESSIONAL REASONS? [1 = NOT AT ALL; 7 = TO A GREAT EXTENT] THE EMPLOYER AS A PERCENTAGE OF PROFITS.
7 Ranked: Ranked:
6 60%
5 62/140 138/140
4 40%
3
2 20%
1
0 0%
GUINEA UNITED STATES BENIN MONTENEGRO HONDURAS BELGIUM CAMBODIA KENYA NAMBIA SEYCHELLES NEW ZEALAND BELGIUM
Economic & Investment Outlook 19DECOMPOSING THE TREND
GDP
GDP
POPULATION POPULATION
GDP HOURS WORKED # WORKERS 18-65 YR OLD
HOURS WORKED WORKER 18-65 YR OLD TOTAL
POPULATION
Economic & Investment Outlook 21DIGITAL PERFORMANCE: DESI
DIGITAL ECONOMY AND SOCIETY INDEX (DESI) 2018 RANKING
80
DOWN FROM 6TH
70 PLACE IN 2017
60
50
40
30
20
10
0
DK SE FI NL LU IE UK BE EE ES AT MT LT DE EU SI PT CZ FR LV SK CY HR HU PL IT BG EL RO
1 CONNECTIVITY 2 HUMAN CAPITAL 3 USE OF INTERNET SERVICES 4 INTEGRATION OF DIGITAL TECHNOLOGY 5 DIGITAL PUBLIC SERVICES
Economic & Investment Outlook 22GOVERNMENT'S RESPONSIVENESS TO CHANGE FUTURE ORIENTATION OF GOVERNMENT
RESPONSE TO THE SURVEY QUESTION "IN YOUR COUNTRY, TO WHAT EXTENT DOES THE GOVERNMENT RESPOND [1 = LIMITED; 7 = HIGH]
EFFECTIVELY TO CHANGE/CHALLENGES?" [1 = NOT AT ALL; 7 = TO A GREAT EXTENT]
8 8
Ranked: Ranked:
6 6
62/140 62/140
4 4
2 2
0 0
SINGAPORE UNITED STATES UNITED ARAB SAUDI QATAR BELGIUM SINGAPORE LUXEMBOURG UNITED STATES UNITED ARAB SAOUDI BELGIUM
EMIRATES ARABIA EMIRATES ARABIA
DIGITAL ECONOMY AND SOCIETY INDEX (DESI) 2018, INTEGRATION OF TECHNOLOGY DIGITAL ECONOMY AND SOCIETY INDEX (DESI) 2018, HUMAN CAPITAL
90
Ranked: Ranked:
80
70 5/29 70 12/29
60 60
50 50
40 40
30 30
20 20
10 10
0 0
DENMARK FINLAND IRELAND SWEDEN BELGIUM FINLAND THE NETHERLANDS SWEDEN UK LUXEMBOURG BELGIUM
4A BUSINESS DIGITISATION 4B E-COMMERCE 2A BASIC SKILLS AND USAGE 2B ADVANCED SKILLS AND DEVELOPMENT
Economic & Investment Outlook 23ICT GRADUATES: DEAD LAST
% AS A PERCENTAGE OF ALL TERTIARY GRADUATES
10
8
6
4
2
0
DEU
FRA
LUX
AUT
CZE
AUS
USA
TUR
EST
MEX
BRA
OECD
CAN
HUN
CHE
NLD
IDN
IND
IRL
LVA
FIN
ESP
SWE
SVK
KOR
PRT
BEL
SVN
CHL
POL
DNK
GBR
NZL
NOR
MEN WOMEN
Economic & Investment Outlook 242. RISKS #BNPPFOutlook A/ BREXIT
BREXIT - 50 WAYS TO LEAVE YOUR LOVER
Economic & Investment Outlook 26BREXIT SCENARIOS: MORE PROMINENT TAIL RISKS
No
Our old scenario Yes (90%) (10%)
WILL THE UK AND EU REACH A DEAL
ON A WITHDRAWAL AGREEMENT?
OUR CURRENT SCENARIO No
Yes (80%)
(20%)
Disord.
Our old scenario Smooth and soft (60%) Orderly hard (30%) hard
(10%)
WILL THE ULTIMATE OUTCOME
BE ‘SOFT’ OR ‘HARD’? No Disorderly
OUR CURRENT SCENARIO Soft Brexit Orderly hard
Brexit hard Brexit
(10%) (50%) Brexit (20%)
(20%)
Economic & Investment Outlook 27EU: WHY IT MATTERS
TOTAL GDP RANKING
G10 – INDIVIDUAL COUNTRIES G10 – EU27 COMBINED
2016 2030 2050 2016 2030 2050
1 USA China China 1 USA China China
2 China USA USA 2 EU27 USA USA
3 Japan India India 3 China EU27 India
4 Germany Japan Indonesia 4 Japan India Indonesia
5 UK Germany Japan 5 UK Japan EU27
6 France UK Brazil 6 India UK Japan
7 India France Germany 7 Brazil Brazil Brazil
8 Italy Brazil Mexico 8 Canada Indonesia Mexico
9 Brazil Indonesia UK 9 South Korea South korea UK
10 Canada Italy Russia 10 Russia Mexico Russia
Economic & Investment Outlook 28DECISION TIME
ACCEPT AMEND REJECT
Economic & Investment Outlook 30WHAT HAPPENS NEXT?
PARLIAMENT REJECTS
Renegotiate Revoke Extend 2nd No deal
Article 50 Article 50 referendum
General
election
Economic & Investment Outlook 31WASTE OF TIME
DEAL RATIFIED
STANDSTILL TRANSITION
to December 2020
BACKSTOP INVOKED EXTENSION OF TRANSITION
CU, heavy regulatory alignment but no SM CU & SM
2022 GENERAL ELECTION
DEADLINE
Economic & Investment Outlook 322. RISKS #BNPPFOutlook B/ TRADE WAR
THREE TRADE WARS BETWEEN US & CHINA (1)
Economic & Investment Outlook 34THREE TRADE WARS BETWEEN US & CHINA (2)
Economic & Investment Outlook 35THREE TRADE WARS BETWEEN US & CHINA (3)
Economic & Investment Outlook 362. RISKS #BNPPFOutlook C/ CHINA
BLOWING BUBBLE AND CHANGING GROWTH MODEL
Economic & InvestmentEconomic
Outlook & Investment Outlook 3939SHADOW BANKING AT THE CENTER
CORPORATE DEBT
Private SMEs/high-risk SOEs
borrowing from shadow banks
HOUSING BUBBLE FINANCIAL REPRESSION
Real estate developers borrowing Shadow banks investing Investors searching
from shadow banks in real estate higher yields
PUBLIC DEBT Potential risk spill-over BANKING SECTOR
Local governments borrowing Banks searching
from shadow banks SHADOW BANKING higher profit margins
Economic & Investment Outlook 40SOE’S WEIGHING ON PRODUCTIVITY AND FINANCING
RATE OF RETURN ON ASSETS BELOW BORROWING COSTS FOR CHINESE SOES*
China, State-owned industrial and construction enterprises, difference between adjusted return on assets* and borrowing costs
%
2
1
0
NEGATIVE
-1
06 08 10 12 14 16 18
*STATE-OWNED ENTERPRISES
Economic & Investment Outlook 41HOUSING NO LONGER AFFORDABLE FOR AVERAGE CHINESE CITIZEN
AVERAGE PRICE PER SQUARE
METER TO BUY APARTMENT IN
CITY CENTRE
565 28,150
Hong Kong 28,149.64 $
London 17,648.50 $
Singapore 16,144.59 $
Beijing 14,637.80 $
Shanghai 14,372.20 $
Zurich 14,279.05 $
New York 13,373.19 $
Brussels 3,509.00 $
Economic & Investment Outlook 42VICTIMS OF REORGANISATION (1): INFRASTRUCTURE
INFRASTRUCTURE INVESTMENT (% YTD)
30
25
20
15
10
5
0
(5)
2012 2013 2014 2015 2016 2017 2018
PROPERTY FAI* GROWTH MANUFACTURING INFRASTRUCTURE
*FIXED ASSETS INVESTMENTS
Economic & Investment Outlook 43VICTIMS OF REORGANISATION (2): PRIVATE COMPANIES
CAN REGULATORS GET BANKS LENDING TO THE PRIVATE SECTOR AGAIN?
Estimated share of private-sector firms in new corporate loans (2017 preliminary)
70
PRIVATE FIRM SHARE
60 proposed regulatory target of 50%
% OF NEW CORPORATE LOANS
of new corporate loans
50
40
30
20
10
0
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Economic & Investment Outlook 44CHINA: CHANGING GROWTH MODEL
HOUSEHOLD CONSUMPTION AS A % OF GDP
US
Brazil
UK
Italy
India
Japan
Germany
France
South Korea
China
0 10 20 30 40 50 60 70
CURRENT 10Y AGO
Economic & Investment Outlook 45CHANGING GROWTH MODEL VIA REDUCING SAVING RATE
CHINA’S UNUSUALLY HIGH SAVINGS RATE SHOULD MOVE CLOSER TO GLOBAL NORMS
Household savings rate vs. total dependency ratio, 2015
40
CHINA
35
30
25
Household savings
20 SWITZERLAND
MEXICO SWEDEN
15
NORWAY
10 SOUTH KOREA RUSSIA FRANCE
US GERMANY
5 AUSTRALIA DENMARK
CANADA NETHERLANDS JAPAN
SPAIN ITALY
0
POLAND NEW ZEALAND UK
-5
35 40 45 50 55 60 65
Total dependency ratio
Economic & Investment Outlook 46CHANGING GROWTH MODEL VIA INCREASING URBANISATION RATE
URBAN POPULATION AS A PERCENTAGE OF TOTAL POPULATION, 2013 URBANISATION, THE LAST POWERFUL GROWTH ENGINE
Argentina 92.8% 100 1,000
Japan 92.3%
90 900
Australia 89.5%
France 86.8% 80 800
Brazil 85.1%
70 700
United States 82.9%
Canada 80.9% 60 600
United Kingdom 79.9% 50 500
Mexico 78.7%
Spain 77.7% 40 400
Germany 74.2% 30 300
Turkey 73.3%
20 200
Italy 68.8%
South Africa 62.9% 10 100
Greece 62.0%
0 0
China 59% 80% 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017
Philippines 49.4% Urban population (RHS, millions) Urban population (LHS, % of total)
Rural population (RHS, millions) Hukou urban population (LHS, % of total)
Non-agri (LHS, % of GDP)
Economic & Investment Outlook 473. MONETARY POLICY #BNPPFOutlook
GLOBAL: MONETARY TIGHTENING DRIVING THE SLOWDOWN
5 4.0
3.8
4
Size of balance sheet in % of global GDP
3.6
3.4
3
3.2
Global GDP YOY%
2 3.0
2.8
1 2.6
2.4
0
2.2
-1 2.0
1.8
-2 1.6
2011 2012 2013 2014 2015 2016 2017 2018 2019
BoJ ECB Fed Big-3 balance sheet Global GDP
( % of Global GDP, 1 Year Changes, 6 Quarters lagged ) (volumes, % YOY, Right Hand Scale)
Economic & Investment Outlook 49MONETARY POLICY: OUTLOOK
PROJECTED POLICY RATES FED & ECB
3,50%
3,00%
2,50%
2,00%
1,50%
1,00%
0,50%
0,00%
-0,50%
2016 2017 2018 2019 2020
FED ECB FEDfcst ECBfcst
Economic & Investment Outlook 50INFLATION RISING SLOWLY
Forecast
5 3,0
2,8
4
HICP excluding housing & transportation services
2,6
3
2,4
Output gap* (% GDP, 4Q lag)
Output gap as % of GDP (4Q lag)
2 2,2
HICP** services excluding
1 Housing and transport services 2,0
(% YOY, RHS, 26.4% of HICP) 1,8
0
1,6
-1 1,4
-2 1,2
1,0
-3
0,8
-4 0,6
-5 0,4
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Economic & Investment Outlook 51CHAPTER II INVESTMENT STRATEGY #BNPPFOutlook
Economic & Investment Outlook 53
AT LEAST FOR THE US
%
250
200
150
100
50
0
-50
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
S&P 500 EURO STOXX 50
Economic & Investment Outlook 54THE MARKET STORY OF THE YEAR
%
10
5
0
-5
-10
Jan 16 Jan 31 Feb 14 Feb 28 Mar 15 Mar 29 Apr 16 Apr 30 May 15 May 31 Jun 15 Jun 29 Jul 16 Jul 31 Aug 15 Aug 31 Sep 14
2018
S&P 500 INDEX EEM
Economic & Investment Outlook 55“MAKE AMERICA GREAT AGAIN” SEEMS TO WORK
EUR/USD
1.2650
1.2430
1.2000
1.2000
1.1930
1.1600
1.1600
1.1430
1.1200
1.1200
Jan 15 Feb 14 Mar 15 Apr 15 May 15 Jun 25 Jul 16 Aug 15 Sep 34 Oct 25 Nov 25
2035
Daily Price Average 200 days Average 50 days
Economic & Investment Outlook 56US MIDTERMS
Economic & Investment Outlook 57US ELECTION RESULTS
2016 2018
Economic & Investment Outlook 58THREE LEGGED BULL
STRONG ECONOMIC GROWTH STRONG CORPORATE RESULTS EASY MONETARY POLICY
Economic & Investment Outlook 59RECESSIONS HAPPEN 15% OF THE TIME
US RECESSION DATES BETWEEN 1921 AND 2018
9
8
7
S&P 500 (LOG SCALE)
6
5
4
3
2
1
1921 1931 1941 1951 1961 1971 1981 1991 2001 2011
Economic & Investment Outlook 60NOT A SINGLE CAUSE
US EXPANSIONS AND THEIR TRAGIC ENDS
START FINISH DURATION IN MONTHS RECESSION DURATION IN MONTHS LIKELY CAUSE OF RECESSION
MAY 54 AUG 57 39 8 Fiscal tightening
APR 58 APR 60 24 10 Monetary tightening
FEB 61 DEC 69 106 11 Fiscal tightening
NOV 70 NOV 73 36 16 Oil shock
MAR 75 JAN 80 58 6 Oil shock
JUL 80 JUL 81 12 16 Monetary tightening
NOV 82 JUL 90 92 8 Unknown (Kuwait, S&L?)
MAR 91 MAR 01 120 8 Equity bubble popped
NOV 01 DEC 07 73 18 Financial crisis
JUN 09 ? 107 ? ?
Economic & Investment Outlook 61STILL POSITIVE
RECESSIONS TEND TO BE LED BY CHANGES IN MOMENTUM AMONG HIGHER FREQUENCY ECONOMIC INDICATORS
200
180
160
140
INDEX (JAN 1997=100)
120
100
80
60
40
20
0
1967 1972 1977 1982 1987 1992 1997 2002 2007 2012 2017
RECESSION CLAIMS CONFIDENCE PERMITS ISM MFG SLOOS
Economic & Investment Outlook 62BUT...
POINTS
2838.31
2800
2600
2400
2200
2000
1800
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
2016 2017 2018
S&P 500
Economic & Investment Outlook 63CENTRAL BANKS BUYING (A LOT OF) BONDS
250 PURCHASE OF BONDS BY CENTRAL BANKS 250
BN USD, MOBILE AVERAGE ON 12 MONTHS
200 FORECAST 200
PURCHASE OF OBLIGATIONS IN BILLION USD
150 150
100 100
50 50
0 0
-50 -50
BOJ USD FED ECB USD total
-100 -100
2015 2016 2017 2018 2019
Economic & Investment Outlook 64A SHORT HISTORY OF LONG-TERM RATES
THE LONG HISTORY OF LONG (10-YEAR US TREASURIES) YIELDS
18
16 FEDERAL RESERVE
SYSTEM CREATED
14 1913
12
10
8
6
4
2
0
Economic & Investment Outlook 65WEAK PERFORMANCE OVER THE SUMMER
1500
1400
1300
1200
1100
1000
2014 2015 2016 2017 2018
PRICE OF GOLD IN USD
Economic & Investment Outlook 67A SILVER LINING
22.00
21.00
20.00
19.00
18.00
17.00
16.00
15.00
14.33
14.00
0.60
0.40
0.20
0.00
-0.22
2014 2015 2016 2017 2018
SILVER SPOT $ / OZ SILVER MANAGED MONEY NET POSITIONS / OPEN INTEREST ON 9/11/18
Economic & Investment Outlook 69A RELATIVELY TIGHT MARKET?
USD
140
120
100
80
60 66.34
40
20
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
PRICE OF OIL
Economic & Investment Outlook 71CHANGE IS THE ONLY CONSTANT
TOP 10 TECHNOLOGY COMPANIES
BY MARKET CAPITALIZATION
MAINFRAME PC INTERNET MOBILITY/CLOUD MACHINE LEARNING?
1980 1990 2000 2010 2018
COMPANY MARKET CAP* COMPANY MARKET CAP* COMPANY MARKET CAP* COMPANY MARKET CAP* COMPANY MARKET CAP*
IBM 38 IBM 54 MICROSOFT 604 MICROSOFT 269 APPLE 1,099
EASTMAN KODAK 8 PANASONIC 33 CISCO SYSTEMS 355 GOOGLE 197 AMAZON 982
XEROX 5 TOSHIBA 27 INTEL 274 APPLE 191 MICROSOFT 861
HEWLETT-PACKARD 4 NEC 19 LUCENT TECHNOLOGIES 238 IBM 171 GOOGLE 852
EMERSON ELECTRIC 2 FUJITSU 19 NOKIA 210 CISCO SYSTEMS 138 FACEBOOK 508
TEXAS INSTRUMENTS 2 MITSUBISHI ELECTRIC 16 IBM 193 ORACLE 123 ALIBABA 454
MOTOROLA SOLUTIONS 2 EASTMAN KODAK 13 ORACLE 158 HEWLETT-PACKARD 122 TENCENT HOLDINGS 412
NORTEL NETWORKS 2 SANYO ELECTRIC 13 NORTEL NETWORKS 139 INTEL 113 SAMSUNG ELECTRONICS 312
INTEL 1 FUJIFILM HOLDINGS 12 SUN MICROSYSTEMS 135 SAMSUNG ELECTRONICS 88 INTEL 223
HARRIS 1 HEWLETT-PACKARD 11 DELL 130 QUALCOMM 77 TSMC 216
*IN BILLION USD
Economic & Investment Outlook 73LONG TERM OPPORTUNITIES?
HACK ROBO
45
40
40
35
35
30 30
25
25
20
20 15
10
3.00 4.00
2.50
2.00 3.00
1.50 2.00
1.00
0.50 1.00
0.0 0.00
-0.50
-1.00
Dec Mar Jun $40 Dec Mar Jun $40 Dec Mar Jun $40 Dec Mar Jun $40 Dec Mar Jun $40 Dec Mar Jun $40 Dec Mar Jun $40 Dec Mar Jun $40 Dec Mar Jun $40
2014 2015 2016 2017 2018 2013 2014 2015 2016 2017 2017
Economic & Investment Outlook 74BIOTECH LONG-TERM OPPORTUNITY
NASDAQ BIOTECHNOLOGY INDEX
4500
4000
3500
3000
2500
2000
1500
1000
500
0
500
400
300
200
100
0
-100
-200
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Economic & Investment Outlook 751 3
US BELGIUM
EUROPE
WHERE TO 2
INVEST IN…
Economic & Investment Outlook 76WHERE TO INVEST IN THE US?
Health Care Consumer Discretionary Technology Consumer Discretionary Consumer Staples
245 55,70% 46 37,60% 180 35,80% 130 11,90% 52 17,50%
Target Potential Target Potential Target Potential Target Potential Target Potential
Health Care Equipment
Materials Energy Technology Financials
& Services
89 25,90% 90 14,00% 130 20,10% 110 17,40% 78 20,10%
Target Potential Target Potential Target Potential Target Potential Target Potential
Economic & Investment Outlook 77WHERE TO INVEST IN EUROPE?
Health Care Technology Technology Financials Technology
87 10,00% 100 SEK 30,00% 125 36,30% 27,40 21,80% 110 52,60%
Target Potential Target Potential Target Potential Target Potential Target Potential
Telecom Financials Energy Industrials Materials
176 p 15,00% 46 20,70% 36,5 34,70% 125 23,40% 100 26,60%
Target Potential Target Potential Target Potential Target Potential Target Potential
Economic & Investment Outlook 78WHERE TO INVEST IN BELGIUM?
Holdings Biotechnology Financials Technology Technology
161 15,00% 15 30,20% 62,70 53,30% 28 30,80% 5 70,70%
Target Potential Target Potential Target Potential Target Potential Target Potential
Materials Materials Telecom Utilities Consumer Staples
140 36,20% 10 58,20% 28 19,20% 18 73,10% 83 21,20%
Target Potential Target Potential Target Potential Target Potential Target Potential
Economic & Investment Outlook 79QUESTIONS
ANSWERS
#BNPPFOutlookMIDYEAR ECONOMIC & INVESTMENT OUTLOOK 2018
PHILIPPE GIJSELS, Chief Strategy Officer KOEN DE LEUS, Chief Economist
02/565.16.37 02/312.78.38
philippe.gijsels@bnpparibasfortis.com koen.deleus@bnpparibasfortis.com
@pgijsels @KoenDeLeus
https://blogs.bnpparibasfortis.com/PhilippeGijsels www.bnpparibasfortis.com/nl/blogs/blog-chief-economistTHANK YOU PRESS TEAM Pamela Renders pamela.renders@bnpparibasfortis.com +32 (0)2 312 37 35 Valéry Halloy valery.halloy@bnpparibasfortis.com +32 (0)2 565 46 50 Hilde Junius hilde.junius@bnpparibasfortis.com +32 (0)2 565 47 37 Jeroen Petrus jeroen.petrus@bnpparibasfortis.com +32 (0)2 312 54 84 Hans Mariën hans.marien@bnpparibasfortis.com +32 (0)2 565 86 02
MESSAGE IMPORTANT
La division Private Banking de BNP Paribas Fortis sa, dont le siège social est établi 3 Montagne du Parc à 1000 Bruxelles, RPM Bruxelles, TVA BE 0403.199.702 ("BNP Paribas Fortis Private Banking")*, est responsable de la production et de la distribution de ce document. Ce
document est une communication marketing et ne vous est uniquement fourni dans le cadre d’un service d’investissement spécifique. Il ne constitue pas un prospectus au sens de la législation relative aux offres publiques et/ou à l’admission d’instruments financiers à la
négociation sur un marché. Il ne constitue pas de conseil en investissement et ne peut être considéré comme une recherche en investissement. Il n’a dès lors pas été élaboré conformément aux dispositions relatives à la promotion de l’indépendance de la recherche en
investissements. Par conséquence, BNP Paribas Fortis Private Banking n'est soumise à aucune interdiction relative à l’exécution de transactions avant la diffusion de ce document.
Toute information relative à des investissements est à tout moment susceptible de modification(s) sans aucune notification. Les informations sur des performances passées, des performances passées simulées ou des prévisions ne sont pas un indicateur fiable des
résultats futures. BNP Paribas Fortis Private Banking a pris toutes les mesures raisonnables afin de garantir l'exactitude, le caractère clair et non-trompeur des informations contenues dans ce document lors de sa rédaction. Ni BNP Paribas Fortis Private Banking, ni aucune
des sociétés qui lui sont liées, ni aucun de ses administrateurs, collaborateurs ou employés ne pourront être tenus responsables de toute information incorrecte, incomplète ou absente, ou des éventuels dommages directs ou indirects, pertes, frais, réclamations,
indemnisations ou autres dépenses qui résulteraient de l'utilisation de ce document ou d’une décision prise sur la base de ce document, sauf en cas de dol ou de faute lourde.
Une décision ne peut, par conséquence, être prise sur la seule base de ce document et ne devrait être considérée qu'après une analyse profonde de votre portefeuille ainsi qu'après avoir obtenu toutes les informations et tous les conseils nécessaires de professionnels du
secteur financier (experts fiscaux y compris).
BNP Paribas Fortis a établi une politique afin de prévenir et d'éviter les conflits d'intérêts. Les investissements personnels effectués par les personnes qui participent à la rédaction de ce document sont généralement soumis à un contrôle. De plus, il est interdit d'investir
dans des instruments financiers ou des émetteurs pour lesquels ils rapportent. Ces personnes ont reçu des instructions spécifiques au cas où ils disposent d'information privilégiée.
(*) BNP Paribas Fortis sa est soumise en qualité d'établissement de crédit de droit belge au contrôle prudentiel de la Banque Nationale de Belgique ainsi qu'au contrôle de l'Autorité des services et marchés financiers (FSMA) en matière de protection des investisseurs et
des consommateurs. BNP Paribas Fortis sa est inscrite comme agent d'assurances sous le n° FSMA 25879 A et agit en qualité d'intermédiaire d'AG Insurance SA.
Conflitsd'intérêts
Il peut exister des conflits d'intérêts dans le chef de BNP Paribas Fortis sa et ses sociétés liées à la date de rédaction du présent document. Des règles de comportement et procédures internes, spécifiques, sont élaborées à cet effet. Ces codes de conduite et les mentions
des conflits d'intérêts éventuels dans le chef de BNP Paribas Fortis sa et ses sociétés liées sont disponibles sur http://disclosures.bnpparibasfortis.com et, en ce qui concerne le groupe BNP Paribas, sur https://wealthmanagement.bnpparibas/fr/conflict-of-interest.html.
Vous pouvez également obtenir cette information via votre personne de contact.
Engagementdes analystes
Les personnes nommément désignées comme les auteurs des textes relatifs aux actions individuelles présentées certifient que:
1. toutes les opinions exprimées dans le rapport de recherche reflètent précisément les opinions personnelles des auteurs concernant les instruments financiers et les émetteurs concernés; et
2. aucune partie de leur rémunération n’a été, n’est ou ne sera, directement ou indirecte ment, liée aux recommandations ou aux opinions spécifiques exprimées dans le rapport de recherche.
Economic & Investment Outlook 83BELANGRIJK BERICHT
De divisie Private Banking van BNP Paribas Fortis nv, met maatschappelijke zetel gevestigd te Warandeberg 3, 1000 Brussel, RPR Brussel, BTW BE 0403.199.702 (“BNP Paribas Fortis Private Banking”)*, is verantwoordelijk voor het opstellen en verspreiden van dit document.
Dit document is een marketing communicatie en wordt U uitsluitend verstrekt in het kader van een specifieke beleggingsdienst. Dit document vormt geen prospectus als bedoeld in de op het aanbieden of toelaten tot de handel van financiële instrumenten toepasselijke
regels en bevat geen beleggingsadvies en kan niet worden opgevat als onderzoek op beleggingsgebied. De informatie in dit document is niet verkregen conform de wettelijke en reglementaire vereisten die het uitbrengen van objectief en onafhankelijk onderzoek op
beleggingsgebied beoogt te waarborgen en BNP Paribas Fortis Private Banking is dan ook niet onderworpen is aan het verbod tot handelen voorafgaand aan de verspreiding van dit document.
Informatie betreffende beleggingen kan op ieder ogenblik onderhevig zijn aan wijzigingen zonder verdere notificatie. Informatie met betrekking tot resultaten behaald in het verleden, gesimuleerde resultaten uit het verleden en voorspellingen kunnen, onder geen beding,
opgevat worden als een betrouwbare indicator van toekomstige resultaten. Hoewel BNP Paribas Fortis Private Banking redelijke maatregelen heeft genomen om ervoor te zorgen dat de informatie opgenomen in dit document juist, duidelijk en niet misleidend is, aanvaardt
noch BNP Paribas Fortis Private Banking, noch de aan haar gelieerde vennootschappen, directeuren, adviseurs of werknemers, enige aansprakelijkheid voor enige onjuiste, onvolledige of ontbrekende informatie of voor enige directe of indirecte schade, verliezen, kosten,
vorderingen, aansprakelijkheden of andere uitgaven die op enigerlei wijze voortvloeien uit het gebruik van of het zich beroepen op de in dit document vermelde informatie, tenzij in geval van opzet of grote nalatigheid. Een beslissing om te beleggen dient niet uitsluitend te
worden gebaseerd op dit document en dient slechts te worden genomen na een zorgvuldige analyse van uw portefeuille alsmede na het inwinnen van alle nodige informatie en/of adviezen van professionele adviseurs (met inbegrip van fiscale adviseurs).
BNP Paribas Fortis heeft een beleid vastgelegd teneinde belangenconflicten te voorkomen en te vermijden. Persoonlijke beleggingstransacties van personen betrokken bij de redactie van dit document in het algemeen zijn onderworpen aan monitoring. Verder geldt
specifiek het verbod om in financiële instrumenten of emittenten te beleggen waarover zij rapporteren. Deze personen ontvingen specifieke instructies voor het geval dat ze over voorkennis beschikken.
(*) BNP Paribas Fortis nv staat als kredietinstelling naar Belgisch recht onder het prudentieel toezicht van de Nationale Bank van België en de controle inzake beleggers- en consumentenbescherming van de Autoriteit van Financiële Diensten en Markten (FSMA). BNP
Paribas Fortis nv is ingeschreven als verzekeringsagent onder FSMA nr. 25879 A en treedt op als tussenpersoon van AG Insurance NV.
Belangenconflicten
Belangenconflicten kunnen bestaan in hoofde van BNP Paribas Fortis nv en de met haar verbonden vennootschappen op datum van het opstellen van dit document. In dit verband werden bijzondere gedragsregels en interne procedures uitgewerkt. Deze gedragcodes en de
bekendmakingen in verband met mogelijke belangenconflicten in hoofde van BNP Paribas Fortis nv en de met haar verbonden vennootschappen zijn beschikbaar op http://disclosures.bnpparibasfortis.com en, wat de BNP Paribas Group betreft, op
https://wealthmanagement.bnpparibas/en/conflict-of-interest.html. U kan deze informatie eveneens bekomen via uw contactpersoon.
Certificering van de analist
De personen die vermeld staan als auteurs van de teksten waar individuele aandelen worden besproken, bevestigen dat:
1. alle opinies die vermeld zijn in deze teksten een nauwkeurige weergave vormen van de persoonlijke opinie van de auteurs over het onderwerp financiële instrumenten en emittenten; en
2. geen enkel deel van hun bezoldiging rechtstreeks of onrechtstreeks verband hield, houdt of zal houden met de specifieke aanbevelingen of opinies die in deze teksten worden gegeven.
Economic & Investment Outlook 84You can also read
