July 2024 | In the aftermath of last year's global inflation surge and the subsequent tightening of monetary policies, the economic outlook now looks increasingly fragmented. The US is slowing down, the European Union is gradually recovering, China is in a controlled and policy supported slowdown, and countries such as India are experiencing strong growth. On the inflation side, price pressures are more persistent than expected, but gradually normalizing, allowing major central banks to start cutting rates. We believe investing will require confidence in the search for an asset allocation that can withstand different scenarios, with markets in some areas being priced for the best despite uncertainty stemming from geopolitical risks and the upcoming US elections.
01 | Global growth is expected to reach 3.1% in 2024. Inflation has been stickier than expected, but it is expected to decelerate further towards central bank targets in 2025, allowing central banks to initiate and continue the new cycle of cuts at different speeds.
02 |Equities are still attractive unless we enter a recession, which is not our base case. However, there are concerns about excessive valuations in US mega-caps. Potential opportunities abound in US quality, value and international equity.
03 | After trading in a narrow range, fixed income yields are set for a new course with rate cuts approaching and curves expected to structurally steepen. With yields already at historically appealing levels, a window of opportunity could be opening.
Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of July 9, 2024 . Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the [author] and not necessarily Amundi Asset Management and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected. These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product or service. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks. Past performance is not indicative of future results. Amundi US is the US business of Amundi Asset Management.
