GLOBAL EQUITY VOL OUTLOOK
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Output gap/unemployment data suggests that monetary policy should be much easier going forward. Volatility should follow lower in 6-12 months.
KEY IDEA #1
A ONCE IN A CYCLE OPPORTUNITY IN VOLATILITY
If credit spreads do widen next year, they could drag volatility higher.
KEY IDEA #2
HOWEVER, HEDGE FOR A SECOND WAVE OF CREDIT STRESS NEXT YEAR
European Tech sector is much less volatile than US Tech, but relative performance vs. the market is slightly higher.
KEY IDEA #3
SWITCH OUT OF EXPENSIVE US MEGACAP TECH INTO EUROPEAN TECH
Position for some relief in (VIX) post the US presidential election.
KEY IDEA #4
WE EXPECT ELECTION UNCERTAINTY TO FADE POST THE ELECTION DATE
KEY IDEA #5
ESG AND INDEX VOLATILITY
Remain hedged over the next few quarters, take off hedges after credit spreads widen.
Buy upside on European tech stocks.
For European sectors, ESG scores appear to be somewhat linked to sector volatility.
Environmental factor appears to deliver Alpha (spot performance).
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This page contains financial analysis which reflects the opinion of the Cross-Asset Research department of Societe Generale, at the date of its publication. It does not necessarily reflect the views of the other departments of Societe Generale nor the official opinion of the Societe Generale group. This content has been prepared for use by institutional and professional investors and is not intended for retail investors. Investors should consider this report as only a single factor in making their investment decision.
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This page contains financial analysis which reflects the opinion of the Cross-Asset Research department of Societe Generale, at the date of its publication. It does not necessarily reflect the views of the other departments of Societe Generale nor the official opinion of the Societe Generale group. This content has been prepared for use by institutional and professional investors and is not intended for retail investors. Investors should consider this report as only a single factor in making their investment decision.
© Societe Generale 2020
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KEY IDEAS
KEY IDEAS