Equity markets may have factored in the end of central bank rate hikes, but they do not yet reflect the potential hit to earnings from a slowing economy, Schneller said.
"Recent corporate results, especially 2023 guidance, indicate a negative outlook leading us to maintain a reduced position in equities," he said.
"In the shorter term, there doesn't appear to be an obvious safe haven for investors," said Schneller.
European shares dropped on Tuesday, dented by healthcare stocks, with the pan-regional Euro Stoxx 50 futures index down 0.6%, German DAX futures falling 0.5% and FTSE futures 0.6% lower. U.S. stock futures, the S&P 500 e-minis , were down 0.3%.
In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.4%. The index is up over 8% so far this month. Japan's Nikkei stock index and Australian shares traded slightly down.
Data on Tuesday showed China's manufacturing activity swung back to growth in January but the country's blue-chip CSI 300 index still lost 1.1%. U.S. stock futures fell, pointing to a lower open for the benchmark indices following Monday's losses. At the end of the Fed's two-day policy meeting on Wednesday, investors will be glued to Chair Jerome Powell's news conference for clues on whether the rate-hiking cycle may be coming to a close, and for signs of how long rates could stay elevated.
Markets will also grapple with a flood of U.S. economic data.
"It's a big week for both central banks and U.S. equities, with ... some of the household names due to make earnings announcements that will provide a micro overview of the macro economy," ANZ analysts said in a note. "Risk appetite could be vulnerable to a correction," they said. U.S. Treasury yields edged lower ahead of the central bank meetings and economic data, with the benchmark 10-year note last down 3 basis points at 3.524% . The two-year yield , which rises with traders' expectations of higher Fed fund rates, also fell 3 bps on the day to 4.228%. In currencies, the U.S. dollar, which was poised for its fourth month of declines, was up 0.2% at 102.48 against a basket of other major currencies. The euro fell 0.2% to $1.0832, but was still heading for a gain of 1% this month. In the energy market, oil prices fell ahead of the expected hikes by central banks and on the back of data that showed Russian exports are rising, despite international sanctions.
Brent crude fell 1.2% to $83.89 per barrel.
Spot gold also dropped 0.8% to $1,904.88 per ounce, driven lower by a stronger dollar. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ World FX rates YTD Global asset performance Asian stock markets ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^> (Additional reporting by Ankur Banerjee; Editing by Kenneth Maxwell and Emelia Sithole-Matarise)
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