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:
Recession call removed as modal scenario, but downturn risk still very elevated. Most leading indicators continue to point to recession despite soft landing probability rising. Q3 growth forecast at 2.5%, up from 0.5%. Fed rate cuts from Q3.24. Market currently pricing in rate cuts Mar.24. Chinese economy moved into deflationary territory, expect more stimulus from Chinese policymakers
12-month recession probability lowered to 20% from 25% as cooler wage growth informs conviction that inflation can fall without a recession. Euro area and UK are on similar paths. In contrast, consensus still sees over 60% probability of recession. Fed rates terminated and cuts no earlier than Q2.24. AI investment forecast to approach $200 billion globally by 2025. Dec.23 Brent oil forecast of $86pb and continuing supply deficits increase Q2.24 forecast to $93pb.
Sticky inflation from supply constraints will compel central banks to keep policy tight long term. US earnings are stagnating. Market expectations for margin pickup over next 12m look rosy as worker shortages keep pressure on wages. Expect clear sector winners and region divergences. Japan equities preferred within DM because of relatively easy policy, negative real rates shareholder-friendly reforms. EM better positioned to withstand volatility and supply chain rewiring. Switched EM debt preference to hard currency. Overweight AI-related equities in DM spanning multiple sectors, specifically captured by quality tilt toward AI-beneficiaries.
* 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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