Stocks Rally ‘Way Ahead’ of Economy, Allianz’s Achleitner Says

Discussion in 'Wall St. News' started by ByLoSellHi, Oct 13, 2009.


    Stocks Rally ‘Way Ahead’ of Economy, Allianz’s Achleitner Says
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    By Andrew Frye

    Oct. 13 (Bloomberg) --
    Allianz SE, Europe’s biggest insurer, expects stock markets to fall because economic recovery is lagging behind the 59 percent jump of the Standard & Poor’s 500 Index over the past seven months.

    “The market rally right now is -- my personal view is -- way ahead of real-life developments,” Paul Achleitner, head of finance at Munich-based Allianz, said yesterday in an interview at Bloomberg headquarters in New York. “The expectation level is so high, you’re going to have the risk that there’s going to be a discrepancy in expectation” and economic data, Achleitner said.

    The S&P 500 has surged from a 12-year low on March 9 amid signs the worst U.S. recession since the Great Depression is abating. Still, unemployment in the U.S. climbed in September to 9.8 percent, the highest level since 1983, and economists expect a rebound in consumer spending will wane as joblessness surpasses 10 percent.

    “You’ve got to make sure that you don’t commit yourself too fast,” Achleitner said of managing assets backing Allianz’s insurance policies. “We are cautious on the equity markets in terms of how much we are actually putting to work there.”

    To contact the reporter on this story: Andrew Frye in New York at
    Last Updated: October 13, 2009 09:12 EDT
  2. But then, stocks are always "way ahead" of economic developments.

    The stock market may be wrong about the future, but it isn't
    wrong on the mere statement that it is ahead of the economy.