Feb 1, 2023

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:

No major central bank rate cuts this year. Short-term bonds, high-grade credit and agency mortgage-backed securities offer income opportunities. Despite resilient U.S. Q4 GDP, declining consumer spending suggests growth is slowing at a rapid rate. Fed and Euro CB anchor policy decisions this week; expect rate hikes and holding higher for longer than markets currently anticipate.

Tough Asian H123 expected; deeper export downturn, inventory destocking & capex cuts. H223 Asian rebound resulting from better relative growth prospects, China recovery & strong fundamentals. 25bps USFed rate hikes in February & March, terminating at 4.75-5.00%. Euro area highly exposed to surging energy prices, recession from Q422 until Q323 (GDP: -1%).

US Inflation to reach equilibrium level. 10-year yield to fall3.4% by 2028. Sovereign bonds offer compelling return potential. Equity market valuations have priced in majority of inflation adjustments. Upcoming stock earnings are key indicator for any upside potential. Global economy continues to slow, recession forecast more likely than not over 2023.

* 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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