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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
11/01/2024
Global Investment Views, Equity, Fixed income
Mixed economic signals open up opportunities
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. Although we acknowledge the resilience of the US, not all data in the US and Europe has been straightforward.
10/07/2024
Global Investment Views, Equity, Fixed income
Fed rate cut boosts the markets – but for how long?
Capital markets whipsawed between a weakening US labor market and hopes that the Fed would successfully steer the economy towards a soft landing. Markets are optimistically interpreting the latest policy action, which could potentially boost consumption and investment. We now believe the Fed will ease policy by another 50 bps this year (75 bps previously expected), split equally between its two remaining meetings.
09/09/2024
Global Investment Views, Equity, Fixed income
A summer of reality checks on market expectations
Markets are shifting their focus to economic growth as inflation continues to decline. The primary reason for this shift seems to be weakening consumption, which is now extending to wider sections of the economy. We believe this environment calls for a more prudent stance, and a tactical, incremental risk reduction rather than a structural de-risking. Overall, we are marginally positive on risk assets and suggest staying well-diversified. At the same time, we remain vigilant after the recent yield movements and are wary of potential fiscal risks.
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