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:
New US baseline – deeper recession. UK near-term growth forecast raised, expect 25bp hike in May. Euro near-term growth forecast raised, lower H2.24 forecast as credit tightening will bite. Strong housing recovery and fast infrastructure spending raise China Q1 GDP forecast. EM benefit from China’s reopening and resilient domestic demand. YCC by BOJ in June. While near-shoring and strong US growth have supported Mexico’s GDP, monetary tightening, politics, and drought have dented South America growth.
China: 2023 growth forecast raised. Japan: economic recovery due to fast wage growth and reopening economic activity. BOJ to tweak YCC in June.23. Asia: expect weaker growth H1.23 due to deeper export and industrial downturn. India medium term champion (0.5% rate cuts by end-23). Rate hiking cycle over (except BSP & BOT). US: Recession to begin Q3.23. Rates peaked due to banking stress. Q1.24 rate cuts. UK: mild recession (rates peaked). Europe: Recession taking 0.7% off GBP by end-23. 50bp rate hikes in May and June, plus 25bp in July.
Base case – recession avoidance, but expect decelerated growth for US and Europe in 2023. Market trading 15-20% too high due to consensus estimating strong recovery in profitability but failing to price in increased operating leverage from inflation. Further correction forecast in technology, consumer goods & services and industrials. 15-year historic oil price (inflation adjusted) is $93pb, expect at least this price in 2023. Market will reward EM countries with a clear plan to return to pre-pandemic fiscal balances.
* 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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