Investors should take the first steps toward careful and directed market re-engagement, according to Barclays Capital’s latest flagship quarterly research publication, Global Outlook: A cautious step forward.

“Now is the time to look for assets whose valuations have become attractive,” said Larry Kantor, Head of Research. “For the first time since the euro area crisis began, we see the building blocks of a framework for a sustainable solution. In addition, global growth is holding up better than feared and the makings of a bottom and rebound by the spring are beginning to come into focus.”

Among the key recommendations in the report are a preference for credit over equities based on valuation grounds, and a preference for assets with significant yield and low leverage that are relatively insulated from euro area risks.

Additional themes of Barclays Capital’s Global Outlook include:
  • In equities, investors should favor companies with high dividends, low leverage and low euro area exposure
  • In credit, the preference is for high-grade nonfinancial companies in the US, where the economic background has improved and company balance sheets and profits remain strong
  • Growth in emerging markets is likely to be somewhat slower than seen in recent years; in China, we do not expect the double-digit growth of recent years to continue
  • Geopolitical risks in the Middle East and North Africa have not subsided, and remain a persistent threat to oil supplies and hence the global economy

About Barclays Capital’s Global Outlook

The Global Outlook research report, published quarterly, provides an assessment of all major economies and outlines the likely implications for global financial markets, including commodities, credit, economics, emerging markets, equities, fixed income and foreign exchange.

About Barclays Capital

Barclays Capital is the investment banking division of Barclays Bank PLC. With a distinctive business model, Barclays Capital provides large corporate, government and institutional clients with a full spectrum of solutions to their strategic advisory, financing and risk management needs. Barclays Capital has offices around the world, employs 25,000 people and has the global reach, advisory services and distribution power to meet the needs of issuers and investors worldwide. For further information about Barclays Capital, please visit our website www.barclayscapital.com.

Copyright Business Wire 2010

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