american eagle soaring in the background
2024 Global Market Outlook Midyear Update

How central bank policy could impact your portfolio

 

At midyear, expectations for rate cuts have been pushed out further, with far fewer anticipated, and markets have repriced accordingly. We anticipate growth in the global economy-however, while the U.S. economy remains strong, leading indicators suggest that the narrative of U.S. exceptionalism may fade. We see continued market broadening, with select equity and fixed income opportunities. Most importantly, the ongoing transition from the low rate post-global financial crisis environment to one characterized by higher interest rates may provide favorable conditions for active managers to outperform. 

Three themes for a world transformed

Economics

Navigating macroeconomic fog

Global economies have stayed resilient amid uncertainty, but headwinds are likely to mount in 2024.

Fixed Income

Rethinking fixed income

We think the Fed is likely to remain on hold in 2024. High yield and shorter-term investment-grade corporate bonds could offer opportunities.

Equities

Broadening equity horizons

Equity investors may benefit from casting wider nets in 2024. We see opportunities in Japan, emerging markets, health care, and artificial intelligence (AI).

Key takeaways from our 2024 Global Market Outlook.

Summary with Global Investment Specialist Ritu Vohora, CFA®

View Transcript
The economic distortions stemming from the pandemic have produced tectonic shifts in the global investment landscape. Investors have had to navigate conflicting macroeconomic signals and a market narrative that has gyrated almost every few weeks. Many economies have been resilient in 2023, despite aggressive rate hikes and tightening liquidity. This has fueled hopes of a soft landing. However, as we head into 2024, uncertainties remain. Global growth is at risk, as the long and variable lags of monetary policy start to bite. And while inflation is rolling over, there’s a risk it will inflect higher. We remain neutral on stocks and bonds overall. Bond yields have been on a roller coaster ride in 2023. While central banks are likely at the end of their hiking cycles, the baton of volatility will be handed from the short end to the long end of the yield curve—given supply dynamics and an uncertain economic outlook. We think rate cuts will materialize later than markets expect, but the Fed will remain data dependent. A steepening of global yield curves is likely to be a more significant driver for markets than the outlook for short-term rates. Attractive yields provide the opportunity to lock in income in high-quality bonds. Shorter-term investment-grade bonds, high yield bonds, and emerging market debt also offer opportunities. The massive outperformance of the “Magnificent Seven” tech stocks has been a defining feature of equity markets in 2023. 2024 may invite broader equity opportunities and warrants a diversified approach. Delivery on earnings expectations will be key. Alongside generative AI, health care innovation and falling energy productivity are structural areas of opportunity. We also see select opportunities in Japan, emerging markets, and small-caps. Tectonic market shifts will create new opportunities to put cash to work in 2024. It will also demand a greater focus on fundamentals, diversification, and risk management. A fertile ground for active investors.

Tactical allocation views

Get the T. Rowe Price Multi-Asset Division’s expert views on the relative attractiveness of asset classes and subclasses over the next six to 18 months.
 

Read Now

Watch the webinar

Our chief investment officers weigh in on the state of markets and the economy heading into 2024. Continuing education credits available for financial professionals. 

 

Watch Now

Infographic: Key Themes From the 2024 Global Market Outlook 

Take a closer look at key themes that could impact the economy and markets in the first half of 2024.

Regional Market Outlooks

Key areas of focus for investors in markets around the world.

From the Field

China: Time to revisit an unloved asset class

An economy that is in transition.

From the Field

Europe must tread a fine line to avoid stagnation

Weak macro outlook must be balanced with need to tackle inflation.

Views are the opinions of the Global Market Outlook Midyear Update authors as of June 7.

Active investing may have higher costs than passive investing and may underperform the broad market or passive peers with similar objectives.

T. Rowe Price cautions that economic estimates and forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. Actual outcomes could differ materially from those anticipated in estimates and forward-looking statements, and future results could differ materially from any historical performance. The information presented herein is shown for illustrative, informational purposes only. Any historical data used as a basis for this analysis are based on information gathered by T. Rowe Price and from third-party sources and have not been independently verified. Forward-looking statements speak only as of the date they are made, and T. Rowe Price assumes no duty to and does not undertake to update forward-looking statements.

Where securities are mentioned, the specific securities identified and described are for informational purposes only and do not represent recommendations.

Additional Disclosure

Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). BARCLAYS® is a trademark and service mark of Barclays Bank Plc (collectively with its affiliates, “Barclays”), used under license. Bloomberg or Bloomberg’s licensors, including Barclays, own all proprietary rights in the Bloomberg Barclays Indices. Neither Bloomberg nor Barclays approves or endorses this material or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.

London Stock Exchange Group plc and its group undertakings (collectively, the “LSE Group”). © LSE Group 2024.All rights in the FTSE Russell indexes or data vest in the relevant LSE Group company which owns the index or the data. Neither LSE Group nor its licensors accept any liability for any errors or omissions in the indexes or data and no party may rely on any indexes or data contained in this communication. No further distribution of data from the LSE Group is permitted without the relevant LSE Group company’s express written consent. The LSE Group does not promote, sponsor or endorse the content of this communication.

Important Information

This material is being furnished for general informational and/or marketing purposes only. The material does not constitute or undertake to give advice of any nature, including fiduciary investment advice, nor is it intended to serve as the primary basis for an investment decision. Prospective investors are recommended to seek independent legal, financial and tax advice before making any investment decision. T. Rowe Price group of companies including T. Rowe Price Associates, Inc. and/or its affiliates receive revenue from T. Rowe Price investment products and services.

Past performance is not a reliable indicator of future performance. The value of an investment and any income from it can go down as well as up. Investors may get back less than the amount invested.

The material does not constitute a distribution, an offer, an invitation, a personal or general recommendation or solicitation to sell or buy any securities in any jurisdiction or to conduct any particular investment activity. The material has not been reviewed by any regulatory authority in any jurisdiction.

Information and opinions presented have been obtained or derived from sources believed to be reliable and current; however, we cannot guarantee the sources’ accuracy or completeness. There is no guarantee that any forecasts made will come to pass. The views contained herein are as of the date written and are subject to change without notice; these views may differ from those of other T. Rowe Price group companies and/or associates. Under no circumstances should the material, in whole or in part, be copied or redistributed without consent from T. Rowe Price.

The material is not intended for use by persons in jurisdictions which prohibit or restrict the distribution of the material and in certain countries the material is provided upon specific request. It is not intended for distribution to retail investors in any jurisdiction.

Australia – Issued by T. Rowe Price Australia Limited (ABN: 13 620 668 895 and AFSL: 503741), Level 28, Governor Phillip Tower, 1 Farrer Place, Sydney NSW 2000, Australia. For Wholesale Clients only.

Canada – Issued in Canada by T. Rowe Price (Canada), Inc. T. Rowe Price (Canada), Inc.’s investment management services are only available to Accredited Investors as defined under National Instrument 45-106. T. Rowe Price (Canada), Inc. enters into written delegation agreements with affiliates to provide investment management services. 

EEA – Unless indicated otherwise this material is issued and approved by T. Rowe Price (Luxembourg) Management S.à r.l. 35 Boulevard du Prince Henri L-1724 Luxembourg which is authorised and regulated by the Luxembourg Commission de Surveillance du Secteur Financier. For Professional Clients only.

New Zealand – Issued by T. Rowe Price Australia Limited (ABN: 13 620 668 895 and AFSL: 503741), Level 28, Governor Phillip Tower, 1 Farrer Place, Sydney NSW 2000, Australia. No Interests are offered to the public. Accordingly, the Interests may not, directly or indirectly, be offered, sold or delivered in New Zealand, nor may any offering document or advertisement in relation to any offer of the Interests be distributed in New Zealand, other than in circumstances where there is no contravention of the Financial Markets Conduct Act 2013.

UK – This material is issued and approved by T. Rowe Price International Ltd, Warwick Court, 5 Paternoster Square, London EC4M 7DX which is authorised and regulated by the UK Financial Conduct Authority. For Professional Clients only

ID0007111
202406-3624184

A destination for all our clients