TOL - 16th Feb, 2024
Fidelity's Global CIO shares his 4 favourite asset classes for 2024
Global CIO Andrew McCaffery also tells me that their predictions for a soft landing have more than doubled in just the last three months.
While every investor has different time horizons, it's safe to say that three months now feels like an eternity in markets. At the end of November 2023, Fidelity International was pricing in a 60% chance of a standard, cyclical recession. In recent weeks, strong disinflation forces and central bank language pivots have caused Fidelity to reprice its expectations dramatically.
Fidelity International's Global Chief Investment Officer, Andrew McCaffery, tells me that the chances of a soft landing have increased from 20% to 45%, and the chances of a no landing scenario have also increased from 5% to 15%.
And while that sounds like good news, there is a very important catch. McCaffery says he does not see the soft landing narrative and the six rate cuts currently being priced into rates markets as being compatible. He argues that any more rate cuts than the three that the Fed has projected may give the air of an impending downturn.
In this extended edition of Views from the Top, McCaffery sits down with me to discuss his views on global markets, why he thinks the negative European narrative is overdone, and what he makes of the stock market rout in China.
Plus, he shares three more asset classes worth looking at in 2024.
Timestamps
- 0:00 - Intro
- 0:44 - What has changed in markets and what hasn't changed over the last 40 years?
- 2:17 - Why 2024 in markets will really be a continuation of 2023
- 4:09 - Fidelity increases its likelihood of a soft landing from 20% to 45%
- 6:53 - Are 6 Federal Reserve rate cuts and a soft landing compatible?
- 8:12 - Fidelity's expectations for the Fed
- 8:57 - Is European and UK pessimism overdone?
- 10:26 - Are European stocks and credit investments more appealing?
- 12:15 - Why Fidelity prefer mid-caps to small-caps
- 14:37 - The outlook for fixed income assets
- 17:00 - Opportunities across emerging markets
- 18:35 - What looks appealing in Chinese equities
- 21:04 - Andrew's View from the Top
Deeper research to see what others may miss.
Fidelity is an active fund manager that focuses on bottom up global research. With one of the largest buy side research teams in the world, we have a unique ability to identify investment themes and ideas across different market cycles. Find out more.Never miss an update
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Hans leads the team's coverage of the global economy and fixed income. He is the creator and moderator of Signal or Noise, Livewire's multimedia series dedicated to top-down investing.
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Hans Lee,
Livewire Markets
Hans leads the team's coverage of the global economy and fixed income. He is the creator and moderator of Signal or Noise, Livewire's multimedia series dedicated to top-down investing.
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Hans leads the team's coverage of the global economy and fixed income. He is the creator and moderator of Signal or Noise, Livewire's multimedia series dedicated to top-down investing.
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