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:
China’s 2023 GDP growth to reach 5.6%, in line with the above 5% target. Chinese residents have accumulated 6.55 trillion yuan (5.4% of nominal GDP) in savings during the pandemic– growth therefore fuelled by pent-up demand. Recent HSBC EM Sentiment Survey showed sentiment improvement despite recent market volatility, particularly in EM FX. 67% expect EM currencies to appreciate over next 3 months, up from 22% in December.
Recession base case remains (70% likely), but larger downside risk involving banking sector stress. Expect a moderately worse recession than consensus and market forecast. Market incorrectly anticipates rate cuts starting in July 2023. Instead, expect rate hike trajectory to remain. March 16th ECB raised rates by 50bp. March 22nd and 23rd expect 25bp increase by Fed and BoE. Strong China reopening, but growth forecast at 5.3% and below market consensus.
Current market gyrations rooted from rate hike campaigns and not from banking crisis. Recession foretold. Recent U.S. CPI confirmed persistent inflation and it will not fall to Fed’s target. Fed will continue with rate hike projection and will not rate cut to resuscitate growth. Inflation-linked bonds upgraded to bigger overweight. Risk assets not pricing in coming recession – underweight equities, downgrade credit and prefer income from short-term govt. bonds. EM appeal given strong Asian economic restart.
* 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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