Macro: Sandcastle economics
Invest wisely in Q3 2024: Discover SaxoStrats' insights on navigating a stable yet fragile global economy.
Chief Investment Officer
Summary: Consensus is calling for a dovish tilt from the Federal Reserve with investors banking on a risk-on push. Saxo, however, sees no change and an IOER cut resulting in a small risk-off move and a correction inside the present bull market.
We continue to think the market is in a sideways formation after the strong run-up in Q1. We see the next risk infliction point coming in July/August where enough time will have passed for the market to realise that improvement in economic activity is not forthcoming, particularly not from a policy response of lower funding costs. That timeline also, and notably, moves us past the conclusion of the China-US trade deal.
Our risk outlook is neutral with a small overweight in long-term US fixed income relative to cash.
For more information about the FOMC decision, click here.
Click here for an excellent update from briefing.com (chart and introductory analysis below).