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 2023 growth forecast cut amid rising evidence that post-Covid recovery has rapidly lost steam. Investment and consumption demand in the rest of Asia to weaken on lagged monetary policy effects, uncertainty and US recessions spillovers. Rate hike cycle largely over (except BOT, RBA and RBNZ), expect central banks to pause for now, with easing from late-2023. US recession base case with terminal rates reached and rate cuts from Mar 2024. Euro area to avoid recession, but still expect modest consumption fall. Final 25bp hike by the BoE in June with cuts in H2 2024.
Debt ceiling raise is catalyst that ends recent bear market rally due to significant liquidity contraction. Expect considerable volatility increase. Project 20% lower 2023 earnings estimates than consensus. Market incorrectly pricing in 2/3 Fed cuts in 2023. Out of consensus view - US soft landing. This is supported by both US income, consumer spending and labour market data – all slowing but not falling off cliff. Moreover, big drag on economic growth from housing correction will turn neutral by Q3 23. Fed to pause in Jun. Gradual slowing core inflation keeps Fed hold until Mar 24. Oil price forecast lowered significantly, Brent to stay in recent $75-$85pb range.
Recession remains foretold. US stocks reach 2023 highs on debt ceiling deal tailcoat. Yields climbed on expectation of rate hike pause or cuts. We don’t see rate cuts this year. US PCE is preferred inflation measure of Fed, predict wage pressure from worker shortages keeping inflation above policy targets for some time. First-quarter earnings contracted for the second-straight quarter, but less than expected. Fallout from the banking sector troubles and further tightening of credit conditions means private credit appeals over public. India digital payments efficiency gains will boost consumer spending sectors domestically.
* 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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