AB's Zlotnikov Warns of U.S. Recession in 2018

The video discusses the potential for a recession in 2018, driven by factors like a stronger dollar, tighter financial conditions, and high corporate margins. It explores market challenges, including inflation concerns and the Fed's position. Investment strategies are examined, focusing on reflation trade and shifting equity exposure to Europe and Japan. The video also analyzes European banks and value opportunities, highlighting the need for capital recovery mechanisms.

What is one reason the potential recession in 2018 might not be very deep?

• Strong government intervention

• Lack of economic excesses

• Increased consumer debt

• High corporate margins

What is a key factor that could lead to a fall in U.S. stocks by the end of 2017?

• Rising unemployment rates

• Fed falling behind the curve

• Decreasing corporate profits

• Increased consumer spending

How has the investment strategy shifted in response to the economic outlook?

• Reduced exposure to European markets

• Increased focus on U.S. equities

• Shifted equity exposure to Europe and Japan

• Invested heavily in Italian banks

Why is there caution in investing in Italian banks?

• Lack of capital recovery framework

• Strong competition from other banks

• High interest rates

• Political instability

What makes European stocks attractive from a valuation perspective?

• Narrow valuation spreads

• High dividend yields

• Strong economic growth

• Wide valuation spreads