Key highlights from this interesting read:
2023 turned out to be a better year for economies than what was forecasted. They still believe a recession is more likely than not.
The debate in the bond market has been centred around how quickly will rate cuts be delivered.
They believe that interest rates wont be slashed anytime soon and therefore a recession is more likely than not.
Banking tensions have been growing after the 3 failed banks in the US and Credit Suisse in Europe.
Bank lending survey highlights that almost 50% of the US Commercial banks and nearly 25% of banks in the Eurozone had already tightened corporate lending standards.
When profits come under pressure firms cut back on investment, then on staff in an attempt to boost the margins. This creates the cycle of higher unemployment leads to further downturn in demand, profits etc.
Weakening profits are usually followed by weakening in employment. However an interesting point to note would be that the competition for workers has dramatically increased post pandemic.
Goods prices are unlikely to help central banks meet their inflation targets as in the past.
EU Gas inventories look well placed for next winter
Dividend yields in the emerging markets look particularly attractive, standing close to their widest gap to developed markets in 20 years.
The gap between the valuations of the top 10 and the rest is at its widest levels since 2000.
The demand for certain metals like lithium, copper and silicon will soar as the energy mix is transformed.
In most major economies, the ratio of over 65s to the working population will rise over the coming decades leaving fewer workers to support more dependents.
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