Will German-led Fiscal Reforms be Transformative for Europe?
Yes, in response to weak growth and a changing defence landscape, taking off the fiscal straitjacket should catalyse a more growth-supportive economic environment within Europe.
Europe
Should Investors Underweight Euro Area Equities Given Trade Wars, Elections, and the Weak Growth Outlook?
No. All three factors have weighed on euro area equity and currency markets to some extent in recent months, but we recommend continuing to hold euro area equities at benchmark weights.
Review of Market Performance: Calendar Year 2024
Most risk assets enjoyed strong returns in the calendar year (CY) ended December 31, 2024. US equities led on better-than-expected economic data and AI-related growth.
Private Infrastructure: Secular Themes Offer Compelling Opportunities
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.
VantagePoint: As the Narratives Turn
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.
Review of Market Performance: Fiscal Year 2024
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.
Is the French Election Another Existential Risk for the Eurozone?
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.
European Central Bank Cuts Interest Rates by 0.25%
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.
Has the Euro Area’s Economy Bottomed?
Yes, we believe that the euro area’s economy bottomed either in fourth quarter 2023 or first quarter 2024.
The United Kingdom and Japan Entered Technical Recessions in Q4
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.