26-03-2024 · Insight

Equity outlook: Building on momentum

The proverbial ‘wall of worry' looks less daunting as we enter Q2 with the US economy continuing to show resilience and Europe’s economy appearing to have bottomed and inflation down, if not out.

Download the publication


    Authors

  • Kees Verbaas - Global Head of Fundamental Equity

    Kees Verbaas

    Global Head of Fundamental Equity

  • Audrey Kaplan - Lead Portfolio Manager

    Audrey Kaplan

    Lead Portfolio Manager

  • Wim-Hein Pals - Head of Emerging Markets team

    Wim-Hein Pals

    Head of Emerging Markets team


At the end of last year this seemed to be an equity bull market running on euphoria over AI but this quarter broader strength has developed, as we hoped it would, with record index highs being hit in Europe also.

The view that there will be a sting-in-the-tail of higher rates or that the weak commercial property sector will drag the financial system, and then the wider economy, into a slump, is now a minority one. It’s so far, so good in 2024, and the market is raising year-end targets. We are now about to move into the dovish period of the cycle, albeit it at a slower pace than anticipated by investors. The recent interest rate cut by the Swiss central bank confirms that view.

In emerging markets, many central banks are lowering interest rates. Brazil for instance passed its sixth cut already. With inflation falling in tandem, it allows even more room for policy relaxation. Is this all too good to be true? We don’t think so, and believe emerging markets can do really well this year.

Looking at the global election cycle from a financial markets’ point of view, it’s all been smooth so far and in Q2 we don’t expect any surprise from India either. Of course the big one all investors are watching is in November in the US. Whoever wins, the stock market promises a good place to be with both Biden and Trump likely to pursue expansionary fiscal policies into a monetary easing cycle. That makes any coming correction, even a steep one, look like an opportunity.

In this edition of our Quarterly we give you our outlook for developed and emerging markets, an interview with our European Stars strategy lead Mathias Büeler, perspective on two Industrials conferences in Miami, a primer on transition finance, a contrarian view on Japan real estate, and we introduce our new Emerging Markets ex-China strategy. Enjoy!

Download the publication

Let's keep the conversation going

Keep track of fast-moving events in sustainable and quantitative investing, trends and credits with our newsletters.

Don’t miss out
Robeco

Robeco aims to enable its clients to achieve their financial and sustainability goals by providing superior investment returns and solutions.

Important information This disclaimer applies to any documents and the verbal or written comments of any person in presentations or webinars on this website and taken together is referred to herein as the “Information”. The services to which the Information relate are NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws and must not be relied or acted upon by any other persons. This Information does not constitute an offer to sell, or a solicitation of an offer to buy, any financial product, and may not be relied upon in connection with the purchase or sale of any financial product. You are cautioned against using this Information as the basis for making a decision to purchase any financial product. To the extent that you rely on the Information in connection with any investment decision, you do so at your own risk. The Information does not purport to be complete on any topic addressed. The Information may contain data or analysis prepared by third parties and no representation or warranty about the accuracy of such data or analysis is provided.
In all cases where historical performance is presented, please note that past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. Robeco Institutional Asset Management B.V. (“Robeco”) expressly prohibits any redistribution of the Information without the prior written consent of Robeco. The Information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to law, rule or regulation. Certain information contained in the Information includes calculations or figures that have been prepared internally and have not been audited or verified by a third party. Use of different methods for preparing, calculating or presenting information may lead to different results. Robeco Institutional Asset Management UK Limited (“RIAM UK”) is authorised and regulated by the Financial Conduct Authority. RIAM UK, 30 Fenchurch Street, Part Level 8, London EC3M 3BD (FCA Reference No:1007814). The company is registered in England and Wales under Ref No. 15362605.

In all cases where historical performance is presented, please note that past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. Robeco Institutional Asset Management B.V. (“Robeco”) expressly prohibits any redistribution of the Information without the prior written consent of Robeco. The Information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to law, rule or regulation. Certain information contained in the Information includes calculations or figures that have been prepared internally and have not been audited or verified by a third party. Use of different methods for preparing, calculating or presenting information may lead to different results. Robeco Institutional Asset Management B.V. is authorised as a manager of UCITS and AIFs by the Netherlands Authority for the Financial Markets and subject to limited regulation in the UK by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.