Macro Monthly Podcast with UBS Asset Management - 2024 Outlook edition
Dec 20, 2023
auto_awesome
Evan Brown, Portfolio Manager, and Tom Digenan, Head of Americas Investment Solutions Specialists, discuss their macro outlook for the year, including growth, inflation, and potential recession. They highlight the resilience of private sector balance sheets, economic developments in different regions, and risks to the outlook such as labor market cooling and inflation. They also express optimism for the year 2024.
The team's macro outlook for 2024 predicts a soft landing in the economy with growth holding up, inflation coming down, and consumers continuing to spend, supported by healthy real incomes and resilient private sector balance sheets.
Europe's economic performance is affected by sluggishness in consumer spending due to the Russia-Ukraine War and natural gas shock, but positive developments in real incomes, strong employment, and falling inflation contribute to a moderate outlook, with export dependency on China playing a role.
China's deleveraging process in the property sector weighs on overall growth, but consumer spending and investment outside of property are rebounding, and lower goods prices, along with lower rates and a weaker US dollar, support the global economy.
Deep dives
Outlook for 2024: Soft Landing with Declining Inflation
The team's macro outlook for 2024 is characterized by a soft landing in the economy, with growth holding up and inflation coming down. Real incomes are growing at a healthy rate, allowing consumers to continue spending. The resilience of private sector balance sheets suggests that businesses and consumers are not overextended, reducing the risk of a recession. The Federal Reserve has acknowledged the progress in inflation reduction and is actively discussing rate cuts, which could further support economic growth.
Europe: Sluggishness and Caution
Europe is experiencing sluggishness in consumer spending, partly due to the Russia-Ukraine War and the natural gas shock. However, employment remains strong, and inflation is falling faster than in the US, contributing to positive developments in real incomes. While European manufacturing shows some signs of improvement, the overall outlook for Europe is moderate, with export dependency on China affecting economic performance.
China's Deleveraging and Global Economic Context
China is undergoing a long-term deleveraging process related to the property sector, which weighs on overall growth. However, consumer spending and investment outside of property are bouncing back. The combination of sluggishness in Europe and China has allowed goods prices to come down, easing financial conditions. This, along with lower rates and a weaker US dollar, supports the global economy, particularly the US market.
Hear from top investment professionals from the UBS Asset Management’s Multi-Asset Team, this month featuring Evan Brown, Portfolio Manager and Head of Multi-Asset Strategy, and Tom Digenan, Head of Americas Investment Solutions Specialists.
Get the Snipd podcast app
Unlock the knowledge in podcasts with the podcast player of the future.
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode
Save any moment
Hear something you like? Tap your headphones to save it with AI-generated key takeaways
Share & Export
Send highlights to Twitter, WhatsApp or export them to Notion, Readwise & more
AI-powered podcast player
Listen to all your favourite podcasts with AI-powered features
Discover highlights
Listen to the best highlights from the podcasts you love and dive into the full episode