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中金:美元与利率回落周期之下 明年关注两条主线

CICC: Under the declining cycle of the US dollar and interest rates, focus on two main lines next year

新浪港股 ·  11/14/2023 10:32

According to a research report released by China Financial Corporation, the global market will continue to be turbulent in 2023. Among them, the US economy has shown greater resilience than expected, Europe as a whole is weak, and emerging markets with rapid investment in manufacturing have performed well. Looking ahead to 2024, CICC believes it can generally follow two main lines: 1) Affected by high oil prices, high interest rates, and high wages, corporate profits face cost pressure, and the economic growth rate may continue to decline in 2024, driving interest rates on US bonds and the US dollar to fall. Opportunities in 2024 may be US Treasury bonds, precious metals, Japanese and emerging markets, and non-US currencies; 2) declining global demand and tightening liquidity will continue to suppress commodity prices, upstream profits will fall, and may be concentrated in manufacturing countries; at the same time, considering the impact of global industrial chain restructuring, CICC is more optimistic about the performance of emerging markets dominated by manufacturing (such as Southeast Asia, India, Mexico, etc.) and developed regions (Japan).

At the industry level, if upstream profits continue to be transmitted to the middle and lower reaches, it is recommended to focus on structural opportunities in midstream manufacturing and downstream consumer sectors.

Global markets will continue to be volatile in 2023. On the economic side, the US economy has shown resilience beyond expectations, but Europe as a whole is weak, and emerging markets that invest more rapidly in manufacturing are better. Global inflation levels have generally declined from high levels, but are still higher than pre-pandemic levels. Central banks in Europe and the US quickly tightened their monetary policies, and the credit growth rate declined significantly. In terms of assets, the market continues to compete in “higher for longer” (higher for longer) and “soft landings.” Among the major global asset classes this year, developed country stock markets (Japan, US) and gold performed well; by sector, consumption and artificial intelligence are two major themes in developed markets.

Looking ahead to 2024, CICC believes it can generally follow two main lines. First, affected by high oil prices, high interest rates, and high wages, European and American companies generally face the problem of rising costs, and corporate profits are under pressure. The economic growth rate may continue to decline in 2024, driving interest rates on US bonds and the US dollar to fall. Following this main line, if the US economy weakens in the history of recovery and the downward phase of US bond interest rates suggest to CICC, CICC believes that 2024 opportunities may be in US Treasury bonds, precious metals, Japanese and emerging market stock markets, and non-US currencies.

On the other hand, declining global demand and tightening liquidity will continue to suppress commodity prices, and upstream profits will fall. CICC believes that logically, profits may be concentrated in manufacturing countries; at the same time, considering the impact of global industrial chain restructuring, economies dominated by manufacturing may continue to benefit. Regionally, CICC is more optimistic about emerging markets dominated by manufacturing (such as Southeast Asia, India, Mexico, etc.) and developed regions (Japan).

Specifically, the Eurozone's overall economic growth rate has slowed this year, and inflation is still sticky, so the challenge of stagflation remains. The economic momentum of Europe and the US may remain divided, the euro has maintained a volatile trend, and the relative performance of the Eurozone equity market has not reached an inflection point. Japan's economic development momentum after the epidemic is rapid. CICC believes that the economic growth rate is expected to be higher than the potential economic growth rate, and the probability of a recession is low. Benefiting from the continued recovery of Japan's domestic economy, favorable financial reports on inflation, and support from individual investors, CICC believes that the Japanese stock market may maintain its outstanding performance in 2024. CICC in Southeast Asia is mainly optimistic about Vietnam and Thailand: Vietnam is benefiting from export recovery and real estate sector reforms, while Thailand's domestic political environment and economic policies may usher in a turning point.

Looking at the global industry, artificial intelligence and global consumption strengthened in the first half of 2023, and since the second half of the year, rising oil prices and rising interest rates have driven the performance of the energy and financial sectors. Looking ahead, if the US and European economies slow down, upstream commodity prices fall, and interest rates decline, upstream profits may continue to be transmitted to the middle and lower reaches, and the middle and lower streams (especially the middle stream) will benefit. It is recommended to focus on structural opportunities in midstream manufacturing and downstream consumption sectors. In this report, CICC discussed in greater depth the global industries currently covered by the International Group of Research by dividing them into upstream (raw materials, energy, and bulk), midstream (manufacturing and TMT), and downstream (major consumption).

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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