Carla de Waal

Multi-Asset Team Q4 2024 outlook

The US continues to grow robustly, while China grapples with deflation and the euro area's recovery remains fragile. India and Japan show growth, but their impact on global growth is limited. Despite a slowing job market, US household incomes are rising, and inflation fears have eased, allowing the Fed to consider rate cuts. The upcoming US presidential election could significantly impact global trade, with potential new trade wars under Trump or political gridlock under Harris.

South African equities maintained their strong post-election momentum, driven by renewed investment confidence and an easing of loadshedding. Despite a slow start to the year, the economy grew in the second quarter, supported by household and government consumption. Business confidence remains low, but recent reforms and potential interest rate cuts offer hope for future growth.

With the SA elections concluded, foreign flows into SA assets have started to pick up again. SA assets have been under-owned yet offer more value and less political risk than most of our EM peers.

Geopolitics remain the biggest risk to markets. With the upcoming US elections and two major ongoing wars, we expect volatility to remain elevated.

Our current positioning remains closely aligned with our strategic asset allocation benchmarks, maintaining a slight defensive tilt. Fixed income is favoured over equities on a risk-to-reward basis, and SA assets are preferred over offshore assets.