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TORONTO, November 27, 2023 – Mackenzie Investments (“Mackenzie”) today released its economic and market forecast for the year ahead in its 2024 Market Outlook. The annual report features commentary from a range of investment experts and portfolio managers who offer insights into emerging themes that may impact Canadian and global capital markets in 2024.
Mackenzie forecasts slowing global growth in 2024 as developed economies move past peak inflation, and major central banks approach the end of a two-year interest rate hike cycle. The report predicts that elevated geopolitical tensions will contribute to volatility and could put upward pressure on energy prices and constrain global trade, while fixed income markets and the energy transition themes will likely represent compelling investment opportunities.
“With consumers continuing to draw down their pandemic savings and government spending in decline, our outlook points to slowing growth in 2024,” said Lesley Marks, CIO of Equities, Mackenzie Investments. “Elevated macroeconomic risks suggest a ‘safety first’ investment approach, with bonds becoming more attractive and opportunities for equities to appear among a lower earnings backdrop later in the year.”
Mackenzie has identified three key themes that it believes will provide opportunity for investors in 2024:
Look to Bonds to Drive Yield
Bond yields are reaching highs not seen since the 2008 financial crisis and may lift the asset class to the forefront of asset allocation decisions in the year ahead. High-quality bonds with attractive yields may offer better opportunities for income-seeking investors and provide balance to portfolios through enhanced diversification.
“We’re facing a more challenging part of the business cycle, and there are some signs that economic momentum is slowing,” said Steve Locke, CIO of Fixed Income and Multi-Asset Strategies. “Even with the ending of rate hikes, unless inflation normalizes global economies are at risk of entering a ‘higher for longer’ interest rate environment. Yield levels will remain a major economic theme in 2024, particularly for interest-rate-sensitive Canada.”
The Energy Transition Will Create Compelling Opportunities
Mackenzie predicts that 2024 will bring continued investment and advancement in solar generation and storage, electric vehicle manufacturing and infrastructure, creating opportunities for investors looking to diversify into the space. Natural gas and carbon capture technology may take a more prominent role in achieving climate goals.
Innovation Will Likely Drive Growth
Investors seeking durable growth will navigate a more challenging landscape in 2024. As growth becomes scarcer, investors may find opportunities in businesses with strong competitive positions, high barriers to entry and healthy balance sheets. Artificial intelligence, the experience economy and the energy sector represent compelling opportunities for growth and innovation in the year ahead.
“Looking to 2024, it will be important for investors to remain diversified and maintain a portfolio that is aligned with their risk tolerance. Focusing on quality investments and capitalizing on growth potential will help investors who are seeking returns navigate the uncertainty in the markets as economic indicators such as inflation and interest rates return to normalized levels,” concluded Ms. Marks.
To learn more about Mackenzie Investments’ 2024 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 $183.3 billion in assets under management as of October 31, 2023. 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 $250 billion in total assets under management and advisement as of October 31, 2023. For more information, visit mackenzieinvestments.com.
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