Individual investors are often bombarded with specific stock calls and targets.
However, we believe you can get a better medium to long term perspective by considering asset class, sector, thematic and macro economic views.
To help you, every week, we pour through the research produced by some of the larger institutions, and summarize their market thoughts.
Below are this week’s 3 updates:
Estimate 80% chance of US recession (up from 70% last quarter) over the next year with only 1 of 12 signals indicating No. Forecasts for both US growth and inflation are below consensus, but still only expect mild recession lasting 2 or 3 quarters. Expect two more 25bp Fed hikes by the end of the year and rate cuts starting within 12 months. Recent stock rally lacks durability, May 2024 forecast for S&P500, FTSE100 and MSCI EM at 4125, 7700 and 1010 respectively. Currency forecast for May 2024; USD-CAD 1.26, EUR-USD 1.20, USD-JPY 116, GBP-USD 1.30.
Forecast global GDP slowing from 3.1% in 2022 to 2.3% in 2023, and 2.2% in 2024. Still expect inflation stickiness to persist, 2023 global forecast at 6.3% and 4.8% for 2024. Modest downward revision to 2023 driven almost entirely by China and commodity price effects in other EM. Property sector drag continues; China GDP forecast thus lowered from 6.3% to 5.3%. US will enter downturn in Q4, followed by a year of contraction and a European recession in 2024. June Fed pause whilst BoE and ECB continue inflation fight with rate hikes, policy divergence supports preference for US over Eurozone and UK equities. Expect gold prices to go modestly lower over the near term, but the likely broad USD decline should limit declines.
Expect US 2023 soft landing, with inflation and wages slowly easing, as well as job gains. Consistent with this expectation, outlook continues with Fed peak rate at 5.1% for an extended period before making the first 0.25% cut in March 2024. However, market is currently predicting two more 0.25% rate hikes. Q2 earnings estimates revised lower by 7.5% since the beginning of the year and no second half recovery forecast. The market for artificial intelligence technologies could reach $275 billion by 2027. Expect USD to appreciate given its current high yield in a world of weak global growth. Six-month Brent oil price projection broadly stable at about $75/$80 a barrel.
* Please note these are not the thoughts or analysis of illio but the respective institutions. We have summarized what we believe are key points. We assumes no responsibility or liability for any errors or omissions in the content of this site. The information contained herein is not intended to be a source of advice and the information contained in this website does not constitute investment advice.
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