2024 Outlooks

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US

Company Rating GDP Inflation Unemployment Rates Dollar Index EPS SP500 Notes
JPM[1] 8 3.75% 4200
  • Developed market economies slip into mild recessions. Weaker growth helps to push inflation back towards central bank targets. Interest rates are eventually cut, albeit reactively rather than proactively, and to levels still well above pre-pandemic lows.
  • Overall, we would be cautious about the idea that economies can easily cope with interest rates of 5% or more in the US and UK, and 4% in the eurozone. We would expect the damage of higher interest rates to become increasingly evident in the consumer and business spending data in the coming months
  • It seems very unlikely that the central banks would cut pre-emptively without a significant slowdown in activity. Although a more cautious approach would mean that rate cuts come later than the market currently expects, we suspect the central banks will eventually cut further than predicted.
Goldman Sachs 6 2.1% 2-2½% 4.6% 4700
  • Continue to see only limited recession risk and reaffirm our 15% US recession probability. We expect several tailwinds to global growth in 2024, including strong real household income growth, a smaller drag from monetary and fiscal tightening, a recovery in manufacturing activity, and an increased willingness of central banks to deliver insurance cuts if growth slows.
  • Most major DM central banks are likely finished hiking, but under our baseline forecast for a strong global economy, rate cuts probably won’t arrive until 2024H2
  • We expect returns in rates, credit, equities, and commodities to exceed cash in 2024 under our baseline forecast
Morgan Stanley[2] 3 4500 Morgan Stanley strategists suggest an overweight across a broad range of bonds, an equal weight in both stocks and cash, and a significant underweight for commodities.
Bank of America[3] 4 5000 Claudio Irigoyen, head of Global Economics, expects inflation to gradually move lower across the globe, allowing many central banks to cut rates in the second half of 2024 and avoid a global recession. Head of US Economics Michael Gapen expects the first Fed rate cut in June and the central bank to cut 25 basis points per quarter in 2024.
Ed Yardeni[4] 4 5400 The economy remains resilient but inflation continues to fall closer to the Fed’s 2.0% target next year
Citi Global Wealth[5] 8 1.6% 2.5% 5.1% Growth
  • Thesis sees a deceleration in economic activity during the early part of 2024, but no synchronized recession, followed by an economic acceleration later in the year
  • We expect a 12% increase in earnings per share (EPS) over the next two years.
Well Fargo[6] 7 0.7% 2.5% 5.6% 4.75% - 5% 99-103 $220 4600-4800
TD Securities[7]
  • Globally, while Europe and Canada may already be in recession, we see a U.S. recession by mid-2024 and relatively stable Chinese growth around 5%. Global demand will dip in 2024. Fiscal policy remains a dominant force in the U.S. and China. Any changes to policy will have important implications for growth.
  • Central banks are likely to remain on hold until mid-2024 in most cases with the BoJ bucking the trend with hiking in the spring & autumn and the PBOC easing policy to help support growth. We expect more cuts than the market does, especially for the FOMC and BoE. We also expect QT to continue in the background as central banks cut rates; the one exception to this is the Fed.
Charles Schwap[8] The big picture we see for 2024 is of a shallow U-shaped recovery in global economic and earnings growth, rather than the V-shape seen in the last two global recessions of 2008-09 and 2020.
Blackrock[9]
  • We are underweight the broad market – still our largest portfolio allocation. Hopes for rate cuts and a soft landing have driven a rally. We see the risk of these hopes being disappointed
  • We are on a weaker growth path and got here with more inflation, higher interest rates and much higher debt levels. The upshot for investors? We think the key is to focus on how the economy and markets are adjusting to the new regime. Adopting the typical cyclical playbook may be misguided. .
Amundi[10] 0.6% 2.6 4.00 The United States (US) is expected to face a recession in H1 as stringent financial conditions begin to impact consumers and businesses. In H2, we expect growth to stabilise below its potential and inflation to move closer to its target

Europe

Company GDP Inflation Unemployment Rates EPS Stoxx 600 Notes
Well Fargo[11] 0.6% 2%

References