Research Briefing | Jan 5, 2024

Equities Quick Take – Buoyant investors may be disappointed

Our risk sentiment indicator is flashing red again following the sharp end-of-year equities rally. We see scope for disappointment in the near term as rate cut expectations are pushed back and the earnings recovery stalls.

Our calls:

  • The market has already priced in a very rosy macro outlook for 2024 and is vulnerable to disappointment.
  • We also expect further EPS disappointment in the near term.
  • We think developed market equities will struggle to make further headway and are at risk of a correction in the near term. We see better risk-reward in fixed income assets and in emerging market equities.

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