ORLANDO, Florida, Oct 20 - The 2024 consensus world economic and market view is shaping up to be a repeat of this year's: weaker growth and probable U.S. recession, leading to a strong bond rally as interest rates are cut, and fragile stock markets as weak demand squeezes earnings.
One major hurdle, of course, is the whoosh higher in U.S. bond yields. The longer it continues, the higher that hurdle gets, and the more likely it is the gloomy scenario plays out.The incoming U.S. data offers food for thought. Retail sales smashed expectations in September, triggering a wave of upward revisions to GDP forecasts, and the labor market continues to run hot too.
There are reasons to be skeptical of the data from Beijing. As Societe Generale's Albert Edwards points out, once the quarterly deflator is factored in, nominal GDP growth in the third quarter was actually only 3.5%. "It is not like we are massively bullish on growth in China, Europe, or the US. But as long as the bar to beat expectations continues to be so low, we find it difficult to justify a turn towards a riskoff stance in our tactical asset allocation," HSBC strategists wrote on Wednesday.RISING R-STAR Chris Iggo, chief investment officer for core investments at AXA Investment Managers, reflected the consensus view when he wrote on October 13:"Let me be bold though.
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