Welcome to this year’s outlook from Caspar Rock, Chief Investment Officer, Cazenove Capital.
A likely peak in interest rates has prompted us to add to equities. However, elevated valuations and buoyant market sentiment mean we have a neutral stance on stocks as we enter 2024. We are overweight government bonds, given attractive levels of income.
The US has defied forecasts of a recession, with consumer spending supported by a strong labour market and household savings. However, the interest rate rises we have seen to date are still likely to take a toll on activity and we expect the US economy to slow in 2024.
“The prospect of interest rate cuts should support sentiment in the near term. However, central bankers will be very wary of the risk of a “second wave” of inflation. Markets may be disappointed if rate cuts are not delivered at the pace, or to the extent, that is currently anticipated” said Caspar Rock Chief Investment Officer.
Higher interest rates have had a greater impact on consumers in the Eurozone and the UK, with both regions now close to contraction. In Asia, ongoing challenges in China's housing market continue to depress activity. By contrast, the outlook for Japan is brighter as consumer and business spending rises and the corporate sector embraces structural reform.
This degree of divergence across global markets is unusual and could create tactical opportunities over the coming year.
To find out more, read our wealth management outlook for 2024 here or watch our investment team discuss our outlook.
ENDS
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Note to Editors
About Wealth Management
As a long-established wealth manager with an absolute focus on preserving and growing our clients’ wealth, what matters most to our clients, matters most to us.
Private individuals, family offices, trusts, institutions and charities all rely on us to provide them with bespoke wealth management services. Skilled in investment management, wealth planning and banking services – we also offer discretionary fund management to external advisers and their clients, and we are the largest charity fund manager by assets under management in the UK.
For two centuries we have helped clients look forward to a successful future. With each client, we plan for the long term and invest the time to gain a detailed understanding of their unique circumstances, goals and ambitions. The majority of our clients, and many of our own people, work with us for years, decades and even generations. This creates relationships of unusual depth.
Our experience of navigating complex markets and adapting to change helps us balance risk and reward. The investment expertise we call upon as part of Schroders, a truly global asset manager, combined with our long-standing experience of advising clients, is what sets us apart.
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Cazenove Capital: UK and Channel Islands. Schroders Wealth Management: Singapore and Switzerland.
Schroders Wealth Management, including Cazenove Capital, has £102.6 billion in assets under management globally across all Wealth Management offices (including Benchmark Capital, part of wealth management) as at 30 June 2023.
Further information about Cazenove Capital can be found at www.cazenovecapital.com.
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