By Thyagaraju Adinarayan
March 26 (Reuters) - BlackRock and Credit Suisse reckon it
is time to get back into equities after markets rallied this
week following massive government and central bank stimulus
packages to fight fallout from the coronavirus crisis.
The $2 trillion U.S. fiscal stimulus has triggered big gains
in global stocks, sending investors rushing to dust-off models
from the 2008 crisis to gauge the right time to buy.
World stocks have risen nearly 8% so far
this week and were on track for their best weekly gain since
December 2011. They have recouped more than $5 trillion in the
past two days.
Spotting an inflection point is not easy when the virus is
still spreading rapidly across Europe and the United States, but
BlackRock and Credit Suisse said on Thursday they had turned
slightly bullish on risk asets.
"The unprecedented actions represent the type of decisive
policy response we have been calling for – and set the scene for
an eventual economic recovery," Jean Boivin, head of BlackRock
Investment Institute, said on Thursday.
The world's top asset manager said the market sell-off had
created significant value for long-term investors and told
clients it now favoured "rebalancing into risk assets."
Within the equity space, BlackRock said it preferred U.S.
markets due to strength of Washington's policy response and the
quality of the market.
Many investors are still trying to work out when will be the
right time to re-enter markets. At least one model from JPMorgan
shows the correct time would be now, based on a view that a
recession would be shortlived.
Credit Suisse, which is positive on developed market
equities, said: "There is merit in being an early mover rather
than wait until a market bottom has become apparent for all."
The Swiss bank said that over a six- to twelve-month
horizon, equities offered "attractive value."
Notably, U.S. and European stock valuations based on a
12-month forward price-to-earnings ratio now have dipped well
below historical averages, according to Refinitiv data.
(Reporting by Thyagaraju Adinarayan and Sujata Rao, editing by
Maiya Keidan and Jane Merriman)