Morgan Stanley IM: Pulling Forward "the Boring," Making 2024 a Year for Balance
Jim Caron, CIO of the Portfolio Solutions Group, shares his macro thematic views on key market drivers.
05.12.2023 | 07:02 Uhr
As mentioned in my previous podcast, much of the year-ahead research
is calling for falling inflation, stable to lower policy rates, tighter
credit spreads and a modest upside to equities.
If all this were to be the case, then we could expect low volatility in 2024 i.e., a “boring market.”
But the combination of weaker home sales, a soft inflation print,
anemic Gross Domestic Income and ISM data and a Fed seemingly ready for a
victory lap on inflation implies rates have peaked and may come down.
As a result, both bonds and equities have rallied, and volatility,
as measured by the VIX, has slumped, all appearing to confirm many of
these year-ahead forecasts.
There is one problem with all of this - It’s not yet 2024! In fact, it seems the markets are pulling forward “the boring” bits of the expected returns for 2024.
But, as also mentioned in my prior podcast, I think 2024 will be anything but boring!
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