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Schroders Cuts Global GDP Growth Forecast to 2.5% This Year, Raises Inflation Forecast to 3.3%
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Schroders' multi-asset investment team stated that to reflect the macroeconomic impact of escalating tensions in the Middle East, it has lowered its global gross domestic product (GDP) growth forecast for this year to 2.5% from the previous 2.9%, while raising its inflation forecast to 3.3% from 2.4%. It believes the macroeconomic environment is moving toward stagflation, but continued corporate earnings growth should still provide support for equity markets. In equity markets, given the positive momentum in corporate earnings growth, the firm maintains an optimistic stance, with a preference for technology stocks in asset allocation. It favors the United Kingdom and Canada markets, which are tilted toward energy and resources sectors, and is also constructive on technology stocks in the United States and Asian markets such as Taiwan. Within Asia, Chinese technology platforms are benefiting from the artificial intelligence investment cycle, particularly in downstream applications and digital services, with valuations appearing more attractive than in other AI-focused markets. Regarding commodities and fixed income, as the oil market is driven by geopolitics and showing polarized trends, Schroders remains positive on commodities. Due to concerns over long-term debt sustainability, it prefers gold, which has stronger defensive characteristics, over government bonds. As rising inflation risks push up bond yields, Schroders holds a Neutral stance on overall government bonds. However, given the greater inflation threat facing the United States, it is more cautious on US Treasuries, while favoring Italian bonds with attractive yields and Australian bonds where central bank policies are more proactive. The firm added that if disruptions to Middle East oil supply are contained, markets may face the risk of interest rate hikes. (gc/u) Auto-translated by AI This article was automatically translated by AI, the original language version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. More Details
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