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:
3 of 7 US indicators signal recession, more to follow. Recession expected Q3 2023. Rate cutting awaits a y-o-y inflation rate of 3% (5% in March). 3% expected before Q4. Acute phase of banking system stress has passed, but further credit tightening to follow. Prefer duration municipal bonds 2 to 10-year maturity range for U.S. Treasuries, both offer attractive yield and downside protection. Given S&P500 earnings estimates, expect further advances for some weeks. Major market indices begin bull cycle before recession ends. UK equities stand out due to low valuations. European outperformance hard to maintain given continent’s cyclical nature.
US recession avoidance forecast unaltered. UK and Eurozone outright recession no longer expected. China 2023 forecast lifted from 5% to 5.6% given strong reopening. Global 2023 growth forecast revised from 1.8% to 2.3%. Global annual inflation at 6% this year and above 4% in 2024. Market currently pricing in Fed 2023 rate cuts and ECB rate hikes to continue. However, HSBC does not expect Fed rate cuts until 2024.
Above consensus China 4% y-o-y Q1 GDP growth forecast bolstered by stronger exports & credit growth, fast services consumption recovery and infrastructure investment. Only Malaysia, Philippines, and Thailand in EM have potential for more rate hikes. US growth to continue slowing with household spending to moderate further. Market pricing of peak interest rates fallen to just below 5%. Euro Area growth to accelerate and inflation to decelerate. Stronger than expected UK GDP results in Q1 small expansion forecast. Diversification is key - equity-bond correlation is negative. TFP surrounding AI to grow between 0.2%-1.0%/year.
* 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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