Charles-Henry Monchau

Chief Investment Officer



Welcome to our CIO mid-year outlook!

Risk assets are off to a strong start of the year. Equities, commodities and cryptos are recording double digit gains and have been outperforming bonds and cash. Indeed, global economic growth has been more resilient than expected. And strong earnings momentum is offsetting the fact that the Fed remains reluctant to cut rates at this stage.

As we move into the second half of the year, our key theme is normalisation. Indeed, we believe that global economic growth, the job market, central bank policy, market leadership should all normalise. We also believe that volatility could come back with a vengeance in the coming months.

Here are 5 key trends to watch for the next 6 months



Trend n#1

Normalisation of global economic growth

Despite the Fed’s aggressive tightening campaign, the US economy has been more resilient than expected. However, growing evidence suggests that high borrowing costs are slowly filtering through the economy, which is finally cooling down toward a more sustainable and balanced pace of expansion.

In Europe and in China, 2023 was a negative year in terms of growth. Since the beginning of  2024, both economies havebeen recovering, achieving growth rates consistent with their long-term potential. For them, normalisation in 2024 means the dissipation of the troubles experienced in 2023.

In Japan, nominal GDP is growing for the first time since the 1990’s and interest rates are on the rise. In the Emerging world, countries such as India, Mexico or Vietnam are benefiting from the US-China economic war and the nearshoring / friend shoring theme.
In summary, while some fast-growing economies are expected to decelerate in 2024, others will recover from weaker conditions, contributing to a global normalisation of
economic growth.


Trend n#2
Labour market normalisation

Labour shortages in many sectors have been a remarkable feature of the past three years. Demographic dynamics and surging demand for service sector jobs have driven unemployment rates to record lows in the US and in Europe. This situation has led to an acceleration in wage growth that has fuelled domestic consumption, but also raised
inflationary pressures. Recent indicators have pointed to an easing in tensions on the labour market. Job opening and indicators of turnover are falling back from peak levels.

Underlying dynamics within the labour market have also shifted toward more temporary jobs at the expense of full-time contracts. This normalisation of labour markets will lead to a healthier situation where high employment continues to support consumer spending, but where upward pressures on wages gradually abate.

Trend n#3

Central banks kick off easing cycle

Central banks around the world have had to hike interest  rates aggressively in 2022 and 2023, in response to the inflation revival. As economic growth, labour market conditions, and inflation normalise, the necessity for restrictive monetary policies

Put simply, current interest rates are too high given the environment of moderate inflation and growth. Consequently, central banks are anticipated to reduce interest rates in the future. This trend has already started, with the Swiss National Bank being a precursor in March, followed recently by the Bank of Canada and the European Central Bank.

As growth and inflation normalise on a global scale, the Fed and other central banks will join this trend and gradually adjust their key rates lower too. Barring an unexpected economic downturn, the speed and magnitude of this rate cut cycle will likely be gradual and less pronounced than in the past 25 years.


Trend n#4

The normalisation of the equity market leadership

Nvidia, the artificial intelligence industry leader, was the star of the first half of the year as it briefly joined the $3 trillion dollar club in terms of market capitalisation. As of now, just three stocks - Microsoft, Apple and NVIDIA - now account for 20% of the index, and their outsized gains have helped the S&P 500 to enjoy double-digit returns since the start of the year. However, unlike last year’s very narrow gains, more sectors, asset classes and regions are participating in the upside.

This is a positive sign for the strength and length of the bull market. We continue to see value in diversification. So far, the benefits of AI have gone to companies developing it and providing its infrastructure. The next phase could benefit companies applying AI for productivity gains. We recommend balancing equity portfolios between growth stocks and cyclical and value-style investments.

Trend #5

We also expect a normalisation of volatility

Market volatility has remained subdued so far in 2024. But the outlook for the remainder of the year is less certain. For instance, elections tend to be associated with a perceived
risk of greater public sector instability.

As such, we aim to remain nimble, implement portfolio protections and use volatility at our own advantage to build positions at more attractive prices.


This marketing document has been issued by Bank Syz Ltd. It is not intended for distribution to, publication, provision or use by individuals or legal entities that are citizens of or reside in a state, country or jurisdiction in which applicable laws and regulations prohibit its distribution, publication, provision or use. It is not directed to any person or entity to whom it would be illegal to send such marketing material. This document is intended for informational purposes only and should not be construed as an offer, solicitation or recommendation for the subscription, purchase, sale or safekeeping of any security or financial instrument or for the engagement in any other transaction, as the provision of any investment advice or service, or as a contractual document. Nothing in this document constitutes an investment, legal, tax or accounting advice or a representation that any investment or strategy is suitable or appropriate for an investor's particular and individual circumstances, nor does it constitute a personalized investment advice for any investor. This document reflects the information, opinions and comments of Bank Syz Ltd. as of the date of its publication, which are subject to change without notice. The opinions and comments of the authors in this document reflect their current views and may not coincide with those of other Syz Group entities or third parties, which may have reached different conclusions. The market valuations, terms and calculations contained herein are estimates only. The information provided comes from sources deemed reliable, but Bank Syz Ltd. does not guarantee its completeness, accuracy, reliability and actuality. Past performance gives no indication of nor guarantees current or future results. Bank Syz Ltd. accepts no liability for any loss arising from the use of this document.

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