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:
Fed rates peaked remains base case, but CME Fed fund futures pricing even chance of additional rate hike by Nov. Recession risks fading, and resilient economic data indicates “softish” landing. Rate cut anticipation will push 10-year UST yields toward 3-3.5% over next 6-12m. Stock risk-return outlook more balanced and upgraded to neutral. USD softening over next 6-12m expected. For risk-tolerant investors, long high-yielding currencies appeal, favouring BRL, MXN, CZK, INR and IDR. Gold historically performs well when USD softens; expect delayed higher gold prices, not cancelled. Yet, year-end forecast lowered to USD1,950/oz and downgraded to neutral. China investors should position for both earnings resilience and stimulus beneficiaries, such as online gaming and advertising defensive companies compared to the broader China internet sector. USDCNY near 7.4 by year end.
2024 recession forecast, but soft landing call finely balanced. Expect higher short-term rates for longer, and slower rate of interest rate declines in Q2 2024. An equally-weighted Index is a bit more active than a passive Index selling winners and allocating more to “losers”. Therefore, it is a mean-reverting, contrarian strategy. H2 2024 S&P 500 forecast of 5000 and year end target of 4600. Fitch downgrade equals no impact.
Asia base case assumes export downturn bottoms out and improves, reflecting improved Q4 tech cycle. Rate hiking cycle is over, expect an extended pause this year and rate cuts in Q1.24 (BOK, RBI, BSP and BI). Korea; despite likely H2.23 recession, BOK to begin cutting rates in Q1.24 (150bp cuts in 24). ECB tightening is over as euro area inflation to fall sharply in the coming months; yet core should remain above target. UK activity thus far proved more resilient than expected, but recent surveys could reignite recession risks
* 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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