Credit to WELLS FARGO Investment Institute December 2023 2024 Outlook A pivotal year for the economy and markets https://t.ly/2bF1E 1). Global economy ● We anticipate a moderate global economic slowdown (including in the U.S.) in the first part of 2024, followed by a gradual, U.S.-led global recovery in the latter months of the year. ● We expect the U.S. dollar's peak to correspond with this economic cycle's bottom, though a global recovery later in the year should spark risk appetite and prompt a moderate pullback in the greenback. 2). Global equities ● We favor quality and a more defensive posture within equities as earings per share (EPS) decelerate and the economy slows. As a result, we prefer U.S. large caps over U.S. mid caps and small caps, as well as developed - market over emerging-market equities ● Health Care, Industrials, and Materials are our favored sectors while we hold unfavorable ratings on Consumer Discretionary and Real Estate. 3). Global fixed income ● We expect U.S. Treasury yields to remain volatile in 2024, declining early on as the economic slowdown gathers momentum but rising as the recovery evolves in the latter months of the year. ● High-quality credit, in both corporate and municipal bonds, remains paramount to our guidance 4) Global real assets ● The bull super-cycle' that began in 2020 pushed many commodity prices to decade highs. However, even the best of bull markets consolidate. We remain favorable on commodities but expect performance will continue to moderate as the global economy slows further ● For 2024, we are unfavorable on real estate investment trusts (REITs) as headwinds for the asset class remain strong and fundamentals continue to weaken 5). Global alternative investments ● Although financial distress levels have remained moderate thus far, we believe the uptrend will resume in the coming quarters and present a robust opportunity set for Distressed Credit strategies (both hedge funds and private-capital funds) ● Global Macro and Relative Value strategies typically exhibit low correlation to traditional equity and fixed-income markets and may provide an opportunity to diversify portfolios if traditional markets turn volatile. https://lnkd.in/gvVHitXd