Global Investment Views - November 2024

The GIV elaborates on the latest views, convictions and outlook of our Global CIOs, different Investment Platforms and the Amundi Institute.

The move up in bond yields, US stocks (record highs in October), and Europe indicate markets’ perception of a perfect scenario centered around strong US growth and falling inflation and a positive impetus from monetary easing in Europe.

1. What are your views on the US economy after the recent revisions by the US Bureau of Economic Analysis?
2. From a cross-asset view, what are the areas of opportunities?
3. Do you see higher geopolitical tensions in the middle east affecting oil prices?

Mildly slowing economic growth in the US, growth moving towards potential in Europe and declining inflation in both regions call for a moderately positive stance on risk. In particular, wage moderation in the Eurozone has allowed the ECB to maintain its course on rate cuts. This monetary easing, along with expectations of policy stimulus in countries such as China, led us to finetune our stance on equities.

The apparent resilience of the US economy and the recent inflation data led the markets to raise their expectations on US interest rates. There now seems to be a debate in the markets as to whether the Fed believes inflation has been beaten and will therefore continue on its rate-cutting path. While there are some tail risks to the disinflation process, the overall trajectory of inflation is declining, and the Fed, along with the ECB, is very mindful of unemployment numbers and economic activity

An environment of declining inflation and a mild US economic deceleration without a recession are constructive for equities. But it doesn’t call for an outright increase in risks because not all markets are displaying a similar earnings potential and valuations. On the former, this earnings season in Europe and US should give us some insights on forward guidance.