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:
Recent bank failures underscore the risk that an earnings recession is looming – forecast well below consensus. Yet, despite market consensus, expect USD to strengthen from its high yield and powerful diversification potential. Asia and EM equities in ongoing bull market. Indian equities poised to join rally after an improving economic cycle outlook. Korea and Taiwan markets to benefit from encouraging developments in the semiconductors and technology hardware cycles.
Japan monetary policy will not be impacted by any US or European financial turmoil – YCC in June earliest. China growth forecast already raised. Weaker Q2.23 Asia growth to improve H2.23 reflecting an improved tech cycle and China growth spillover effects. US recession from Q3.23 and Fed to raise rates by 25bp in May despite banking sector stress. Expect rate cuts to begin Mar.24. Euro activity proven resilient, recession avoidance now forecast. Rates to peak at 4.25% in July, cuts from Q4.24. UK also proven resilient; recession call removed. Peak rates reached.
Expect near term range-bound DM equities as soft-landing and recession narratives oscillate. Absolute and Relative DM equity valuations are high. Forecast 5% contraction in S&P 500 earnings this year. Lagged effects of Fed tightening to appear. High-quality bonds offer higher risk-reward than broad US equities and indexes. Expect a steeper USD depreciation with EURUSD, GBPUSD, and USDCHF reaching 1.16, 1.33, and 0.84 by year-end. Upgraded JPY to most preferred with YCC. AUD appeals due to domestic soft landing and China recovery. Positive Commodities outlook: USD depreciation benefits Gold and tightening market offers Oil upside. EM growth to outpace DM from more advanced policy cycle, e.g. Brazil inflation fallen to 4.7%. EM equity forward earnings prospects offer positive performance.
* 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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