Horizon Handout September 2024

Economics

• Mixed economic picture in the eurozone.
• UK economy on the upswing.
• US economy is set for a landing.

Equities

• Recession worries, negative summer seasonality and the unwinding of carry trades led to a sell-off at the beginning of August.
• Positive economic and central bank signals, share buyback programmes and low volatility then led to a V-recovery.
• Although the blackout period, seasonality and the US presidential election harbour setback risks, the improved economy and central bank turnaround also harbour upside potential. Balanced positioning is required.

Bonds

• Powell gives green light for interest rate cut in September. Demand for Chinese government bonds remains high.
• European corporate bonds remain fundamentally well supported.
• Weak dollar as tailwind for emerging market bonds.

Alternative Investments / commodities

• Geopolitics dominates oil prices in the short term, but OPEC+ determines the fundamental equilibrium.
• Gold is at all-time high thanks to lower real interest rates and a weaker dollar. ETF flows have reversed.
• Industrial metals recover despite weak manufacturing. More potential as industrial activity picks up.

Currencies

• Dollar falls after Powell greenlights September easing.
• Market expectations of Fed rate cuts somewhat exaggerated.
• Swiss National Bank and ECB in step.