Animal spirits back in markets: Geoffrey Lewis, Manulife Asset Management

In a chat with ET Now, Geoffrey Lewis, Manulife Asset Management, says US markets look fully valued at the moment. There is a chance that we will see some correction.

Edited excerpts:

What is the take on how global markets are really moving and what is going to dictate the sentiment this week and perhaps next?

Expectations are riding really high and have gone back to their pre-grow levels financial crisis peak. The peak was in 2004-2006. When you dissect those rates, most of the upside is coming from future expectations. Large businesses are very excited and confident about the impact of the new policies in the US. So I think the risk is what happens when we see hard data coming out which is perhaps not matching those expectations but so far, the data like industrial production and consumption has all been okay.These high expectations can be maintained for some time.

What do you think could be the turning point for global markets because in the next 10 days. we will have a new administration. Everyone is of the opinion that the Trump administration will hit the ground running, They are shovel ready. If we do not see it move or policy change from the Trump administration within the first 15 days, do you think that could make markets act nervous or jittery?

Well I think a lot of good news has been priced in if you see the PMIs versus the markets. Markets do look fully valued at the moment. There is a chance that we will see some correction because Mr Trump seems to believe that his policies can be put into place very quickly whereas from the Congress, we are getting the message that some of these things are going to take longer than many people think, particularly the infrastructure which we think is not really going to kick in until 2018 and the one trillion sounds a lot but per annum it is only 100 billion, it is about half of that of GDP. So that in itself is not going to make a huge difference to be honest. But we have got the animal spirits up.