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Market Forecasts: Q2 2024

Economic resilience and supportive earnings underpin equity markets, though sticky inflation and rate cut delays could hamper attractive bond prospects in the near term.

Chief Economist
Portfolio Manager

Global Economic Outlook

  • Global GDP growth is set to slow moderately from an unexpectedly robust expansion in 2023, with gentle declines to a little further below long-run averages anticipated in both 2024 and 2025.
  • Non-linear progress on inflation is still progress and allows central banks to nurture the soft landing scenario via moderate rate cuts during the second half of 2024.

Emerging Markets Outlook

  • For emerging markets, the more pro-growth policy backdrop in China provides support to EM economic prospects. Improving business activity in export markets such as the US and Europe is also key.
  • Recent bumpy inflation readings have renewed uncertainty around the timing and magnitude of rate cuts. Until the monetary easing impetus broadens across the globe, the improvement in EM growth will likely be subdued.

Global Capital Markets

  • Even as more equity markets eclipse all-time highs, we continue to see a solid foundation for them to advance amid resilient economic growth, healthy balance sheets, and supportive earnings and sales expectations.
  • Over the intermediate term, bond markets also look attractive, but the economic resilience that may benefit equities (alongside stubborn inflation) presents near-term risks for fixed income investments.

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