Franklin Templeton investment professionals more optimistic than at start of 2024
The downbeat tone of the start of 2024 has been replaced with an altogether cheerier tune, according to a new report from Franklin Templeton.
The firm has followed up its inaugural Global Investment Management Survey in January with refreshed views from 250 of its investment professionals, encompassing public and private equity, public and private debt, real estate, digital assets, hedge funds and secondary private market investments.
The latest poll shows expectation for U.S. GDP to reach 2.6% on average for 2024 compared to the 1.6% average reported in January. Respondents see unemployment ticking higher to 4.1% (4.0% in January) with inflation at 2.9% and the federal funds interest rate to end the year between 4.75% and 5.25%.
“When we first conducted this survey in January, we said a global recession should be avoided,” said Stephen Dover, chief market strategist and head of the Franklin Templeton Institute. “Today’s economy is better than it was at the beginning of the year. In fact, we’re now expecting just one or two interest rate cuts from the U.S. Federal Reserve rather than the four we’d predicted six months ago.”
However, U.S. earnings are expected to be disappointing at 7.4% compared to the FactSet consensus prediction of 10.4% and while the S&P 500 is expected to reach 5200, most respondents are bracing for greater volatility.
Another change from the start of the year is the preference for growth and large cap stocks rather than small cap, with technology, industrials, energy, health care and financials in favor.
Nearly two-thirds of respondents expect the 10-year U.S. Treasury rate to be between 4.00% and 4.50% at the end of 2024. The reading at the end of May was 4.61%.
Wells Fargo recently released its
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