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B. G., Opalesque Geneva: Global asset manager Macquarie Asset Management has published its Outlook 2024, which says that global growth will be more challenged as high interest rates and tighter credit conditions increasingly slow economic activity.
2023 saw improvements for investors versus the previous year, with US equities (S&P 500) returning 11.5% YTD, while bonds (10-year Treasuries) have returned -5.4%. By comparison, both asset classes returned -15% in 2022. Despite these improvements, cyclical headwinds persist.
The US remained resilient in the face of the sharpest tightening of monetary policy in 40 years, but key leading indicators - such as the yield curve, monetary aggregates, and credit conditions - suggest the risk of a slowdown in growth, or even a recession, remains.
Beyond the US, the Euro area and UK economies are already on the cusp of recessions as the headwinds from tighter monetary policy intensify at the same time as headwinds from higher energy prices are fading.
For China, Macquarie AM expects that while some recovery in domestic demand in 2024 seems likely, the policy constraints mean the recovery may not be robust, with GDP growth expected in the 3-5% range.
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