Global Markets Outlook 2024: Towards a Better Balance
Published on13 NOV 2023
Topic:
Goldman Sachs Research highlights 10 core investment themes that drive many of its market views.
- Parking the Plane: Inflation nearing target, no imminent US recession, but markets already priced for soft-ish landing.
- The Great Escape (From a Low-Yield Equilibrium): Real yields on core assets mostly back to pre-GFC levels, so a more conventional opportunity set.
- Loosening the Inflation Constraint: Further disinflation could open the door for a weak "Fed put", especially later in 2024.
- US Exceptionalism—More on Growth than Inflation: A benign growth backdrop in most places, but US looks to be the "surest thing".
- The Dark Side of “Higher for Longer”: Higher rates cause ongoing stress for some sovereigns and pockets of corporate and consumer sectors.
- Valuing Duration: Better valuations and a shift from inflation to growth risks make duration more attractive for portfolios.
- A Smaller Carry Cushion: Carry less appealing than all-in yield, limiting the upside even in benign cases.
- Equities—Finding the Right Kind of "Yield": Valuations not uniformly stretched, potential upside if rates fall earlier.
- EM—The Limits of Narrow Outperformance: Selective performance reaching limits, US rate relief needed to unlock broader gains.
- Balancing Portfolios: More balance as non-cash assets outperform cash in our central case and each asset class protects against a different "tail".
