Barclays' Hobbs Says 'Manically Happy' Markets Don’t Reflect Reality

Barclays Investment Solutions is adjusting its market strategy by reducing developed market equities for the first time since 2012. William Hobbs, CIO, discusses the current market sentiment, which is overly optimistic compared to the economic reality. Despite low recession risks, profit growth is expected to be modest. The focus is on being agile with equities, especially in the US, while maintaining a positive outlook on emerging markets, particularly China. The Chinese government's ability to stabilize the economy is highlighted, despite challenges in policy transmission.

What significant change did Barclays make to its tactical portfolio for the first time since 2012?

• Cut developed market equities

• Shifted focus to technology stocks

• Increased investment in emerging markets

• Increased bond holdings

What is the expected profits growth in the US for the current year?

• Over 20%

• High double digits

• Mid single digits

• Negative growth

What phase of the economic cycle is currently being entered according to the transcript?

• Early phase

• Late phase

• Mid phase

• Recession phase

Which region is Barclays slightly positive about, according to the transcript?

• Developed markets

• North American markets

• Emerging markets

• European markets

What is one of the challenges faced by Chinese policymakers in stabilizing the economy?

• Lack of control over major economic levers

• Confusion among local government officials

• High inflation rates

• Excessive foreign debt