A MULTI-PACE GLOBAL ECONOMY
House Views
October 2024
SG Kleinwort Hambros Monthly House Views October 2024
Our main convictions
Economic Outlook
Our Asset* Allocation*
Our Asset Allocation *in Detail*
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Divergent economic growth. The global economy is set to slow over the next few quarters, but stark differences will persist between regions. Robust growth in the United States should ease as the jobs market comes off the boil.
The euro area economy looks more fragile. German industry continues to struggle, and France is beset by political uncertainty. That said, European economies can count on a boost from falling inflation and synchronised rate cuts. In China, it remains to be seen whether the latest stimulus package can reignite domestic demand. Confirmation that the battle against inflation is won in developed economies should allow the world’s major central banks to further ease monetary policy.
Meanwhile, political– US elections and French budgetary haggling – and geopolitical issues are continuing to heat up and could trigger a spike in market volatility at any time.
We remain Overweight equity markets and constructive on fixed income. With growth set to remain favourably oriented and rates coming down we stand by our equity Overweight. We prefer European markets which look cheap and harbour a good number of value stocks. At the same time, we remain constructive on bonds as they should benefit from the rate cut cycle and act as a hedge against any sharp correction in stock markets. As we continue to expect a synchronised easing cycle, we keep a neutral position on the dollar against major currencies.
Unless specified, all figures and statistics in this report are from Bloomberg and Macrobond on 14/10/2024, publication completion date. Past performance does not prejudge future performance. Investments may be subject to market fluctuations, and the price and value of investments and the resulting revenues may fluctuate downward and upward. Your capital is not protected, and original investments may not be recovered.