The path to a soft landing seems more viable, with recession risks easing somewhat. But the effects of earlier tightening policy are still working through the system even as central banks embrace easier policy in 2024.
Geopolitical events will be key to watch in 2024, given multiple potential flashpoints around the world and a massive election cycle globally.
Emerging Markets Outlook
Inflation continues to retreat, providing room for emerging market central banks to extend the easing bias.
A weaker US dollar and lower interest rates should offer a more helpful backdrop, not only for emerging market economies but also for EM assets.
Global Capital Markets
Although some signs of complacency seem to have crept into equity markets, we continue to see a healthy outlook for global stock markets — some of which appear close to setting new all time highs.
The fundamental outlook for fixed income looks attractive as our expectations are for relatively subdued growth and lower short term interest rates. However, nearer term technical oriented factors suggest the rally in rates may have come too far and too fast.
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Equity securities may fluctuate in value and can decline significantly in response to the activities of individual companies and general market and economic conditions.
Companies with large market capitalizations go in and out of favor based on market and economic conditions. Larger companies tend to be less volatile than companies with smaller market capitalizations. In exchange for this potentially lower risk, the value of the security may not rise as much as companies with smaller market capitalizations.
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