Tracie McMillion warns of consumer confidence impact on pricing power. Janet Henry predicts Fed cuts in September or December due to election month. Mandy Xu discusses how markets price election-related volatility.
Forecasts suggest potential oil prices of $80-$90/barrel in 2021, advocating for diversified commodity investments for non-correlated assets.
Deep dives
Market Opportunities and Asset Classes Outlook
Market experts are cautious about both equities and fixed income, waiting for better opportunities to add to these asset classes. With fixed income yields over 5% at the short end of the curve, the comparison to equity opportunities seems limited. While 2024 might not hold significant upside potential for equities, the outlook for 2025 appears more promising.
Consumer Behavior and Economic Trends
Consumer behavior reflects a bifurcation, with upper-income quintiles driving spending while lower-income quintiles exhaust pandemic savings. Reports suggest consumers pushing back against price increases, impacting company confidence in raising prices. This trend, alongside waning consumer confidence, indicates a potential shift in consumer spending dynamics.
Oil Market Expectations and Investment Strategies
Forecasts indicate potential oil price targets ranging from $80 to $90 per barrel in 2021, with supply constraints possibly driving prices higher. Investment strategies leaning towards commodities, including precious metals and oil, offer opportunities with non-correlated assets. A focus on diversification into assets with lower correlations like commodities and alternatives is advised.
-Tracie McMillion, Wells Fargo Head of Global Asset Allocation Strategy -Janet Henry, HSBC Global Chief Economist -Mandy Xu, CBOE Vice President & Global Markets Head of Derivatives Market Intelligence
Tracie McMillion of Wells Fargo says waning consumer confidence could soon impact companies' pricing power. HSBC's Janet Henry says the Fed is likely to either cut in September or December, given the 'unusual' nature of an election month rate cut. Mandy Xu of CBOE outlines how markets are pricing-in election-related volatility through the rest of the year.