TORONTO, June 3, 2024
/CNW/ - Mackenzie Investments ("Mackenzie") today released its
2024 Mid-Year Market Outlook. The report offers insights for
financial advisors and investors on key trends impacting financial
markets this year and provides an economic outlook for the balance
of 2024.
In the report, Mackenzie states that global Gross Domestic
Product (GDP) growth surged in the first of half of 2024, primarily
driven by growth in the U.S. However, Canada has faced a weaker economic growth
backdrop due to greater sensitivity to higher interest rates.
As a result, the Bank of Canada
(BoC) is likely to reduce interest rates in the second half of 2024
in an effort to boost growth. In fact, the relative difference in
growth rates between the U.S. and Canada could mean the BoC cuts more
aggressively than the U.S. Federal Reserve.
Further, the report notes that equities have remained resilient
despite grappling with persistent inflation and rising bond yields,
as the market looks toward the implications of earnings and
positive economic outlooks.
"The global GDP growth trajectory, propelled by robust U.S.
performance, underscores the resilience of the world's largest
economy," said Lesley Marks, CIO of
Equities, Mackenzie Investments. "Looking ahead to the remainder of
2024, we expect global GDP growth to continue to hold, offering
support for earnings growth, and an overall positive tailwind for
risk assets such as equities."
Mackenzie forecasts that the three key themes it identified in
its 2024 Market Outlook will remain at the forefront of
opportunities for investors for the remainder of 2024:
Corporate and Sustainable Debt Underpin Fixed Income
Opportunities
In response to reduced expectations of
future rate cuts, bond yields have adjusted upward this year,
reversing some of the slide that began in October. Corporate credit
markets have exhibited resilience, reflecting strong fundamentals
and investor demand. We believe real yields on high-quality
corporate bonds present attractive opportunities, and more
sustainable debt options are becoming available as the need for
energy transition financing grows with investors' demand for
sustainable fixed income solutions.
"We've experienced shifting dynamics in fixed income in the
first half of 2024," said Steve
Locke, CIO of Fixed Income and Multi-Asset Strategies,
Mackenzie Investments. "With the Bank of Canada rate cuts we expect ahead, investors
can look to explore the corporate bond market for favorable yield
opportunities, while sustainable debt, including green bonds,
offers both environmental alignment and appealing yields."
The Great Energy Transition is Underway
The
energy transition continues to present opportunities across asset
classes and sectors of the economy. Global economic growth,
resource scarcity and climate change are driving investment in
cleaner energy, which surpassed investment in fossil fuels in 2023.
Opportunities will continue to exist in efficiency technologies,
transportation, water, agriculture and sustainable
infrastructure.
Further, the Artificial Intelligence (AI) revolution is poised
to strain an already overburdened global electricity system.
Generative AI searches consume more than ten times the energy of
traditional search methods, highlighting the associated risks of
decades of underinvestment in power infrastructure.
"Despite temporary headwinds, the energy transition remains a
compelling investment avenue, buoyed by resource scarcity and
ecological constraints," said Ms. Marks.
Innovation Continues to Drive Growth
Investors
are recognizing the transformative potential of AI and continue to
pursue investments in the stock market's successful and established
technology giants. However, the opportunity to capitalize on AI
extends beyond the largest players, to hardware, services and
industries that will enable and underpin AI's journey.
"AI is one of the most extraordinary growth opportunities of our
generation, but investors must assess opportunities carefully and
strategize effectively to take advantage of its growth potential.
History has shown us that disruptive technologies can often yield
both winners and losers," concluded Ms. Marks.
To learn more about Mackenzie Investments' 2024 Mid-Year Market
Outlook and how it can help inform investment decisions in the year
ahead, visit:
https://www.mackenzieinvestments.com/en/institute/insights/market-outlook
About Mackenzie Investments
Mackenzie Investments is a
leading investment management firm with $198.9 billion in assets under management as of
April 30, 2024. Mackenzie
provides investment solutions and related services to more than one
million retail and institutional clients through multiple
distribution channels. Founded in 1967, Mackenzie is a global asset
manager with offices across Canada
as well as in Boston, Dublin, London, Hong
Kong and Beijing. Mackenzie
is a member of IGM Financial Inc. (TSX: IGM), one of Canada's premier financial services companies
with approximately $247 billion in
total assets under management and advisement as of April 30, 2024. For more information,
visit mackenzieinvestments.com.
SOURCE Mackenzie Investments