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:
Mild US recession is base case. 2023 interest rate cuts no longer priced in. US and Euro 2024 inflation to reach 2.5%. Long EUR-USD as prolonged ECB hawkishness remains with Euro currently above US inflation. Little upward pressure on govt. bond yields, overall yields for short dated govt. bonds and corporate bonds appeal. DAX and S&P500 target prices at 17000 points and 4200 and respectively. Overweight Stoxx 600 due to excessive valuation discount to US equities. Europe small cap appeal. AI to drive earnings opportunities, and spill into other sectors, such as Pharma and Biotech. Expect China 2024 growth at 5%. Limited Oil price upside in coming months, $85/bbl medium-term forecast unlikely if China’s economy stimulant efforts remain limited. Gold and Cooper projected to reach 2,200 and 8,700 by Jun 2024.
Latest US data indicates Q3 activity re-acceleration, recession call pushed back. Better than expected Euro area Q2 growth suggests activity to shift back to lower gear. UK unemployment rising faster than expected and July retail sales decelerated sharply, adding evidence monetary tightening is biting. 2023 China GDP growth forecast cure further to 4.5% in view of faster-than-expected housing market deterioration. Sustained Japan growth (balanced between domestic and overseas demands) and CPI inflation above 2% expected.
Forecast additional 25bp Fed hike, but base case shifted from September to November. Fed to cut rates in June 2024 at 25bp per quarter pace. Recommend adding exposure to secular winners in small cap value and equal weight S&P500 as value leads growth by >7.5% per year since 2020. Overweight Energy, Utilities, and in particular Healthcare. Underweight Material, Real Estate, and in particular Consumer Discretionary.
* 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.
.svg)
