Cardano: US recession delayed, European recession brought forward

Cardano: US recession delayed, European recession brought forward

25 oktober 2023

Europa Verenigde Staten Recessie (dreiging)
Recessie1.jpg

Summarising this month’s investment view, Shweta Singh, Chief Economist, and Ross Barr, Senior Investment Strategist, commented:

'Recently, equity markets have been paring back their year-to-date gains but, we think there is a short-term window where positive market performance from equities can resume before growth slows more meaningfully.

Looking further ahead, corporate earnings are likely to weaken - the overall picture suits a cautious approach to investing in the asset class while we continue through late cycle conditions.

Inflationary pressures continue to ease and while the path to 2% is going to be bumpy and long, the path ultimately is towards disinflation, rather than an acceleration in underlying inflationary pressures. However, energy prices are a wildcard card at the moment being propelled higher by the growing tensions in the Middle East and the risk of supply disruption.

It is the effect of energy prices upon headline rates of inflation that strengthens our expectation that developed market central banks will keep the policy stance tight for a long period of time.

In bond markets the outlook is more mixed. Interest rate cycles are mature, and growth is slowing, but inflation remains sticky. However, pricing for shorter maturity government bonds is now closely reflective of our own central bank outlook. We are beginning to turn more positive on the return expectations for government bonds as a result.'

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