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Receding inflation good news, but inflation fight not over
Friday 01 December 2023
Global Investment Views, Equity, Fixed income
Receding inflation good news, but inflation fight not over
December 2023 | The past month saw a recovery in risk assets on the back of continuing disinflation and indications that the Fed is close to peak rates, leading US and European yields to retreat. We aim to balance our long-term convictions (for example, positive on duration) with tactical opportunities across asset classes and strengthening of hedges. Hence, we keep a cautious stance on developed market equities, but we acknowledge potential for a marginal upside.
01 | We slightly upgraded our 2023 forecast for US growth to 2.4%, but we still expect a mild recession in 1H24, given that financial conditions in the real economy are tight.
02 | Borrowing costs in the economy and strength of labor markets matter more to central banks. The Fed and ECB will monitor how these factors affect end-consumption and inflation.
03 | A managed decline in US-China relations is likely, irrespective of who wins US elections next year. Overall geopolitical risks could be high.
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Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of December 1, 2023 . 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.
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Other news
07/01/2024
Global Investment Views, Equity, Fixed income
Inflation trends, central banks and geopolitics to drive markets
In addition to central banks' policies and inflation trends, we believe domestic politics and their impact on international relations will be important determinants of financial markets and economic direction. Our economic outlook is relatively robust, but valuations are tight in some areas of risk assets, allowing us to stay slightly positive on equities overall. However, we reduced our stance slightly in developed market equities and believe investors should consider building protection in some areas here. In bonds, we are constructive on US duration and core Europe, while we maintain our cautious stance on Japan. In corporate credit, EU investment grade is our favorite area.
06/03/2024
Global Investment Views, Equity, Fixed income
Explore the broadening of the rally with Europe
In developed markets, we move to neutral from positive on Japan and we see scope for rebalancing in favor of the UK, European small caps and the US. While the US is displaying strong earnings, we believe Europe should benefit from the moderately resilient economic environment and rate cuts. In government bonds, we are positive on the US and core Europe, along with Italy. In credit, valuations in Euro investment grade appear attractive. We also look for selective opportunities across emerging markets and see oil as providing protection from geopolitical risks.
05/08/2024
Global Investment Views, Equity, Fixed income
Searching for bright spots in a trickier phase
Recent inflation and growth data from the US indicates continued strength in the economy, leading Amundi and various institutions including the International Monetary Fund, to revise US growth forecasts upward. We believe current strong momentum will continue into Q2, but expect a deceleration in H2. Inflation data also points to stickier prices, with upside risks, especially around oil, from the recent geopolitical escalation, opening a difficult phase for central banks. We expect fewer rate cuts but higher uncertainty around policy actions.
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