Industry news and views from Panacea and our partners.
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AXA IM: Fog on the Window
The market has moved markedly from its exuberant expectations of massive cuts by the Fed to price barely three cuts in 2024.
AXA IM: A Conversation about the Conversation
Many members of the ECB Governing Council have already taken to the wires to opine on cutting rate, so it is unlikely in AXA Investmenet Managers view that Christine Lagarde will deny this week that the conversation has started internally.
AXA IM: Take Two: Eurozone inflation falls by less than expected; global stocks hit fresh highs
Eurozone annual inflation fell by less than expected in February, to 2.6% from 2.8% in January, according to an official flash estimate.
AXA IM: Multi-Asset Investments Views: Bad news on the way… and therein lies the good news
The markets have digested an uncomfortable amount of outlook volatility over the past three months, from the soft-landing consensus that supports all asset classes to an emerging narrative, marginally for some and materially for others, of the possibility of a no-landing.
AXA IM: Sustainability in 2024: From net zero to a more holistic approach
Ecosystem vulnerability and biodiversity losses are set to rise up investors’ agendas, more specifically water stress, waste and pollution while the food sector will see increased scrutiny.
AXA IM: Everything’s gone green
Like the artificial intelligence (AI) trend, going green is here to stay and is one of the key investment themes of the age.
Is 2024 going to be a Goldilocks scenario for US HY? (45 minutes CPD)
After a strong 2023, the consensus seems to expect the US economy to cool but avoid significant decline. This may present a potential ‘goldilocks’ scenario for high yield where the higher quality portion of the market could benefit from the stabilization and decline in interest rates, while the lower quality portion of the market could benefit from a stable economy and a slowdown in rising interest expense.
Zoom on the Boom
We explore the possibility that the US strong productivity gains stem from a surge in Intellectual Property investment since the middle of the last decade, which the Euro area has completely missed.
Take Two: OECD raises global growth forecast; S&P 500 hits 5,000
The Organisation for Economic Co-operation and Development (OECD) hiked its 2024 global growth forecast to 2.9%, up from the 2.7% it forecast in November.
An evolving consensus
No recession, lower inflation and stable-to-lower interest rates. That’s the consensus for 2024. It’s adapting, largely due to the resilience of the US economy which posted real growth of 2.5% last year and, in dollar terms, is almost 30% bigger since the end of 2020.
Exploring a Miracle
In the US, strong growth combined with further disinflation has raised the credibility of a very rare occurrence: a painless landing. In the Euro area, Christine Lagarde’s press conference last week may reflect a greater readiness to alter the course of monetary policy in the face of a deteriorating real economy. We remain cautious in both cases.
Take Two: US growth beats expectations; ECB leaves rates on hold
The US economy grew faster than expected in the final three months of 2023, delivering 3.3% annual GDP growth, well ahead of the 2% analysts had predicted.
AXA IM: Postcard from Davos
Given the fraught geopolitical context, there were many reasons to worry for the participants to the World Economic Forum, but the atmosphere was lifted by a sense that the rivalry between China and the US is better managed.
AXA IM: 2024’s elections around the world: The who’s who and the so what…
More than 60 countries, representing almost half of the world’s population, go to the polls in 2024.
AXA IM: Probing the “Last Mile”
The “macroeconomic fate” of 2024 will depend on whether the disinflation process which started last year can continue swiftly, allowing central banks to remove some of their restriction.
AXA IM: Take Two: Doubt over early rate cuts; China meets 2023 growth target
The European Central Bank (ECB) is more likely to start cutting interest rates in the summer, than the spring as markets had anticipated, ECB President Christine Lagarde has indicated
AXA IM: Take Two: Fed indicates high rates for some time yet; Eurozone inflation accelerates
The Federal Reserve may ease monetary policy this year but warned interest rates could remain high “for some time” until inflation falls further.
AXA IM: Risk Asymmetry
While so far in the new year the equity market has not kept up with its pre-Christmas exuberant mood, forward contracts suggest investors still believe that the ECB and the Fed will deliver quick and massive accommodation in 2024
AXA IM: Take Two: US inflation falls; Japan’s economy contracts
US annual inflation decreased for the first time in three months in October, to 3.2% from 3.7% in September, partly because of declining fuel prices. Meanwhile core inflation, which excludes more volatile energy and food prices, fell to 4.0% in October from 4.1%, its lowest rate since September 2021. The data boosted hopes that the Federal Reserve (Fed) will not raise interest rates further. Elsewhere, UK annual inflation fell more than expected to 4.6% in October, from 6.7% in September, the lowest rate in two years.
AXA IM: Pensions investment outlook 2024: Mining for opportunities amid easing growth
Global economic growth is likely to remain subdued in 2024, with some pick-up in 2025. Given bond yields have risen to multi-year highs, fixed income has become increasingly attractive for pension funds
AXA IM: Our views for 2024
For 2024 we expect lower growth, lower inflation and limited interest rate easing. We expect global GDP growth will reach 2.8%, down from an expected 3.0% in 2023 but anticipate acceleration in 2025. 2024 will be significant politically with the US Presidential Election likely to be most consequential globally.
AXA IM: Advances in AI and tighter labour markets sees the robotics and automation sector soar
Significant advances in artificial intelligence (AI) coupled with labour markets that continue to be tight are ramping up the use of automation.
AXA IM: COP28: What can investors reasonably expect?
COP28 follows the first global stocktake of progress towards climate goals, which have starkly highlighted that far more action is urgently needed.
AXA IM: Summer Breeze, Autumn Leaves
A bumper print for Q3, driven by private consumption, further demonstrates the resilience of the US economy to the monetary tightening.
AXA IM: Key technologies fighting climate change and biodiversity loss – an investor’s guide
Despite the progress being made in the battle against global warming, it’s clear the pace and scale of efforts still need to dramatically increase, especially given recent headlines.
AXA IM: The macro impact of Generative AI: Learning from previous tech revolutions
Generative artificial intelligence (AI) promises to be the next in a wave of ground-breaking technologies given it boasts a wide range of applications across sectors and industries.
AXA IM: The age of AI and its long-term investment potential
While the S&P 500 is ahead by some 19% year to date, the tech-heavy Nasdaq index has delivered a formidable total return of 35% as behemoths such as Amazon, Alphabet, Microsoft, Apple and Google have seen their shares prices soar.
AXA IM: At The Top
The ‘Table Mountain’ metaphor for the current monetary policy cycle is interesting. Anyone having visited Cape Town might know that you can ascend the mountain via a very smooth cable car ride.
AXA IM: Lettuces and Prime Ministers (not cabbages and kings)
Voters want more money for public health and education, while public sector workers want higher pay. With just over a year to go before the general election, this is the UK’s political stage.
AXA IM: Sober September
With the summer holidays behind us, speculation about where markets go from here is ramping up once again. But the truth is, not much has changed.