This note provides an update on the current opportunity set in infrastructure investments and highlights some of our preferred areas in the private space, including energy transition and digital infrastructure.
In this edition of VantagePoint, we find that consumers, corporations, and the banking sector remain in good shape, and while US/global economic growth is likely to slow in the second half of 2024 relative to the first, we expect it will remain positive. Although market concentration risk is elevated, given its focus on highly profitable AI-related tech stocks, we would seek to be measured about diversifying such risks.
Most risk assets enjoyed strong returns in fiscal year ended June 2024. Developed markets equities led on better-than-expected economic data and the anticipation that central banks would begin easing monetary policies.
No, we do not believe that the French election poses any immediate threat to the Eurozone, in contrast to several prior Italian parliamentary and French presidential elections.
On June 6, the European Central Bank (ECB) cut its main interest rates by 0.25%, becoming the first major developed markets (DM) central bank to cut rates.
Yes, we believe that the euro area’s economy bottomed either in fourth quarter 2023 or first quarter 2024.
UK GDP fell by more than expected in fourth quarter 2023, which pushed the country into a technical recession. It joined fellow G7 economy, Japan, which had earlier undershot expectations and delivered a second consecutive quarter of negative growth.
Risk assets enjoyed mostly positive returns in CY 2023. Developed markets equities led as fears over the severity of a possible recession moderated and inflation declined.
This chart book examines historical currency momentum, valuation, and fundamentals in nine key currencies—US dollar (USD), British pound (GBP), euro (EUR), Swiss franc (CHF), Japanese yen (JPY), Australian dollar (AUD), New Zealand dollar (NZD), Canadian dollar (CAD), and Singapore dollar (SGD)—to help investors understand how these currencies behave against other major currencies.
Over the past two weeks, central banks in the United States, United Kingdom, euro area, and Japan have all held monetary policy meetings. The communications following these meetings retained a hawkish bias, suggesting further policy tightening may be necessary—except for the Bank of Japan—however, additional interest rate hikes will likely be much less frequent for the remainder of this cycle. Despite this reality, we do not think major central banks will be quick to cut interest rates next year.