Jan 25, 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:

Morgan Stanley
China reopening and European gas price decline delays US recession forecast to H223. 5.4% GDP China growth forecast. US equities unattractive. Bear market to finish early Q2 with S&P500 new lows expected. US earnings to disappoint consensus. Europe earnings to fall 10%. Bonds, specifically emerging markets appeal. Brent oil to return to $100/barrel by H2 23. Long term growth forecast sees India boom. Thematic opportunity in technological decarbonization accelerants.

Bank Of America
US (mild), UK and Euro area Q1 recessions. Three consecutive 25bp monthly rate hikes from February. Year-on-year Core CPI inflation at 2.8% by 2023 end. Weaker USD. Bonds and stocks to rebound H123 and H223 respectively. Positive 2023 return for 60/40 portfolios. 5.5% GDP China growth forecast, with property market no longer an economy drag. Agricultural commodities prices to ease. Asian commodity prices to rise, specifically metals and energy.

Portfolio dynamism, diversification and EM allocation essential. Credit indexes deliver yield. Short-duration bonds key for current economic phase. Defensive allocations appeal, such as infrastructure or REITS. True-uncorrelated assets remain attractive (Natural capital, hedge funds). Peaking US dollar and China policy support creates opportunities for EM in 23. Thailand, Singapore, Indonesia, the Philippines, Malaysia and Vietnam to grow by 3.2% to 7.6%. Volatile European government bond yields expected. Asia credit attractive, particularly investment grade. 

* 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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