Cherchez-vous des occasions de liquidités accrues?

Risk looks attractive as economies across the globe remain strong. Some regions are starting to tread separate paths, uncovering idiosyncratic opportunities.

Originally published on June 21, 2024 by Fidelity International.
Written by Henk-Jan Rikkerink, Global Head of Solutions and Multi Assets, Fidelity International.

Highlights

• Opportunity to take equity risk
• Continued stabilization for China
• Tactical outlook on risk

Is this the post-pandemic normalization we were waiting for?

Economic activity has held up this year as labour markets and consumer demand find a healthier balance. That shift towards equilibrium has partially soothed markets’ primary concern: that economies – and inflation – were proving too resilient to central bank tightening measures.

These improving fundamentals have shaped our thinking around three main themes heading into the third quarter.

The first is that now is a good time to take equity risk.

The second is China. It’s unwise to take your eye off the world’s second-largest economy, even if investors have withdrawn from its shores for now. Policy makers appear more willing to support the economy, helping to establish a period of “controlled stabilization.”

Finally, we’re thinking tactically. As economies diverge and new prospects open up, investors will want to make use of their active armouries.

Soft landing, risk on

The story of 2024 so far has been one of solid economic fundamentals. Signals suggest that the U.S. still leads the pack, but Europe and the U.K. appear to be turning a corner, while continued stabilization in China should mitigate its drag on the global economy.