The Federal Reserve and other central banks remain in focus as investors anticipate a transition from interest rate hikes to interest rate cuts. Businesses and consumers continue to show strength. While the global economy is expected to slow, growth momentum persists and corporate earnings continue to deliver despite high expectations.
Equities
AI enthusiasm continues to push broad U.S. equity indices higher in 2024. Decelerating inflation, moderating interest rates and stable earnings growth are directionally consistent with higher equity prices.
Fixed income
Supplementing high-quality bond allocations with riskier high yield bonds and unique fixed income exposures like non-agency mortgages and reinsurance can boost and diversify portfolio income.
Real assets
Publicly traded real estate investment trusts (REITs) are poised to generate solid returns should interest rates fall. Additionally, increased capital expenditures to power AI and “green” energy should benefit infrastructure companies and commodities.
Private markets
Despite a slow start to the year, indications point to a pickup in deal activity in 2024’s second half. The primary factors supporting our view include a large amount of capital raised by private market investment managers that has yet to be deployed, aging funds that are approaching end of the term and a supportive economic backdrop.
We continue to hold a positive forward outlook for diversified portfolios. Our bias has been to favor equities and real assets over fixed income. We remain optimistic about consumer and business spending – with companies continuing to prioritize shareholders through stock buybacks and dividends. Inflation will likely gradually recede but remain pesky, and investors could seek inflation protection in portfolios through commodities. We do see several opportunities for bond investors across both taxable and tax-exempt fixed income, but we emphasize diversified yield sources.
Learn more in our midyear Investment Outlook: https://bit.ly/4eO5GYE
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Executive
1wGreat Words! Great Commitment to Clients, Scott Ford. Congrats, to 'Team U.S. Bank',on being named No.1 in Investor satisfaction, and Best wishes, to achieve, many more, milestones! Syed Awees, B.Com (Hons), ACCA. Thanks for reposting, & Best wishes, Michelle Viezcas.