Uncertainty is the dominant theme in the equity market landscape of April 2023. Despite the anticipated end of the Federal Reserve's hiking cycle, the report underscores that this focus might miss the real picture. The Fed hikes are, in essence,
In "Allocating to European Equities," BNP Paribas provides a robust analysis of the unexpected resilience of the European economy and equity markets during the dramatic rise in energy prices in 2022. Drawing a parallel to the US market following the
In this research paper titled "Long-Term Asset Allocation: A Different Outlook," the author discusses the significant improvement in expected returns for various asset classes. The main theme revolves around the pivotal issue of growth and the debate on whether recessions
The surge in equities and fall in long-term bond yields so far this year suggest investors have been buying into the idea of ‘immaculate disinflation’ — that easing inflation would be painless for growth in 2023. Such market moves could
FIXED INCOME OUTLOOK JANUARY 2023 The latest data suggests that the US economy is headed towards a period of below-trend growth, if not outright recession. The effect of monetary tightening on aggregate demand is becoming evident, while supply chain pressures
Investment Outlook for 2023: We have become accustomed to uncertain times. Nonetheless, 2022 was an extremely challenging year in financial markets. The investment rationale for the classic 60% stocks / 40% bonds portfolio is that it will deliver solid if
INTRODUCTION In early 2022, scientists announced that the earth crossed six1 of the nine planetary boundaries demarcating the safe operating space for humanity: Pollution from ‘novel entities’2 , freshwater, climate change, biosphere integrity, biogeochemical cycles and land-system change. This unravelling
This downturn is global, not US-centric. The current gap between optimistic equity analysts and cautious economists is particularly pronounced. We believe earnings estimates are at risk as the slowdown we anticipate …
Private market assets have transformed the investment landscape in the 14 years since the global financial crisis. Latest figures show that there is now almost $10tn1 invested in private markets, in what is becoming a global and ever more diverse
The US Federal Reserve’s (Fed) decision at its latest meeting to raise the fed funds rate by 75bp pushed expectations for the peak level next year to more than 4%. Simultaneously, fears that economic growth is slowing more quickly than
INTRODUCTION Inflation has rebounded from the pandemic-induced recession lows with a vengeance. In the US, the pace of the yearly headline consumer price index (CPI) accelerated to 7.5% in January, a 40-year high. Similarly in the euro area, the annual
The tug of war between rising real yields and slowing earnings growth remains a feature of US equity markets, while the knock-on effects of the war in Ukraine hang over European stocks and Covid lockdown concerns cloud the prospects for
The first quarter of 2022 was tumultuous for the global economy and financial markets. The conflict between Russia and Ukraine spawned a rally in US Treasuries, but the disruption to metals, agricultural and energy commodity markets only spurred inflation further.
Chi Time China’s exchange rate policy favours a stable renminbi. However, the positive factors that have boosted the Chinese currency are turning negative, leading to some views that the renminbi should weaken in 2022. They include an expected decline in
Our macroeconomics and markets sections highlight that: While some production constraints will remain well into 2022, they will be resolved eventually, enabling economies to revert to trend growth rates without generating higher inflation. Substantial accumulated household savings mean consumers have
In our 2022 Investment Outlook, we seek to help investors to navigate the rapids as the global economy stabilises during the next phases of the economic recovery. We also consider the possible broader consequences for macroeconomic policy as the world
Chi Time As more countries opt for ‘living with Covid’, China is sticking with a ‘zero Covid’ policy (ZCP) that has brought significant benefits, although not without costs. China may soon be approaching a turning point where the costs outweigh
In the short term, we are concerned that confidence in the growth outlook will wane, particularly given the recently weaker data in China, ‘stagflation risk’, and an earnings season dominated by the ‘margins squeeze’ story. Visibility on the outlook has
