Grabbing the wheel: putting money to work

Q1 2024 Global Outlook: Light turbulence, soft-ish landing

Our Research analysts expect the world economy to slow in 2024, but in a fairly benign fashion, with low peak jobless rates and further declines in inflation in major economies.

This is not an outright soft landing, but it is distinctly soft-ish.

Outlook 2024: The year of disenchantment?

The external environment as well as monetary and fiscal policy should provide strong headwinds. Sentiment will likely be dragged lower by the increasingly evident structural problems. We anticipate a modest recession during the winter half to be followed by a gradual recovery from spring onwards. We expect the government to survive the internal quarrels with respect to the 2024 budget, following the constitutional court ruling. Debt brake reform is unlikely in the short run. A cross-party consensus for a Transformation Fund 2.0 might emerge before September regional elections

We are entering a new post-COVID regime. Elevated interest rates and inflation (as in above recent historic lows) are likely to mute/temper the effect of stock market returns. We expect central banks to focus on containing inflation in the domestic economies rather than rapidly cutting rates to boost growth.

Stock selection is increasingly important to an overall return profile, and we believe the opportunities for skilled, high-conviction managers to add active returns will significantly outweigh the opportunity for market returns.

2024 equity outlook

The global economy will perform better than many expect in 2024

Goldman Sachs Research expects the global economy to outperform expectations in 2024 — just as it did in 2023.

That outlook is based on our economists’ prediction for strong income growth (amid cooling inflation and a robust job market), their expectation that rate hikes have already delivered their biggest hits to GDP growth, and their view that manufacturing will recover. Central banks, meanwhile, will have room to reduce interest rates if they’re concerned about the economy slowing. “This is an important insurance policy against a recession,” Goldman Sachs Research Chief Economist Jan Hatzius writes in the team’s report titled Macro Outlook 2024: The Hard Part Is Over.

Worldwide GDP is forecast to expand 2.6% next year on an annual average basis, compared with the 2.1% consensus forecast of economists surveyed by Bloomberg. In fact, Goldman Sachs Research’s forecasts for GDP growth in 2024 are more optimistic than the consensus for eight of the world’s nine largest economies, as of Nov. 8, 2023. And notably, our economists expect US growth to outpace its developed market peers again.

Top Trends and High Conviction Themes Q1 2024 - Riding the Waves: Trends and Themes Shaping our World

In our complex world, it often helps to tune down the noise of the busy economic data flow and zoom out. Gathering inputs from sociologists, scientists, futurists and political commentators can help us to form a clearer picture of the big trends. That’s important to help ensure that we don’t miss the big turns and opportunities, and it is therefore a great and necessary complement to the usual data analysis. And, frankly speaking, big real-world trends often ‘speak’ more to investors than economic data. So we are glad to present our Top Trends and High Conviction Themes Brochure, for Q1 2024 - “Riding the Waves: Trends and Themes Shaping our World”.

https://www.privatebanking.hsbc.com/wih/investments-Insights/House-views/investment-outlook-q1-2024-opportunities-in-a-complex-world/

After the Rate Reset: Investing Reconfigured

Morgan Stanley Research expects slowing global growth as central banks walk a fine line between inflation and recession.

The mega-themes reshaping the world economy provide a wealth of opportunities and risks for investors in equities. Taking a global view, Alex Tedder and Tom Wilson look across developed and emerging markets for the sectors, countries and themes best placed for the period to come