Investors are moving on from the recession that 'never was'

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Big investors are tearing up market playbooks for 2024 based on timing an expected recession and interest rate cuts, as the world economy proves surprisingly resilient.

Article originally published by Reuters. Hargreaves Lansdown is not responsible for its content or accuracy and may not share the author's views. News and research are not personal recommendations to deal. All investments can fall in value so you could get back less than you invest.

Published by

11 Jan 2024

They are turning lukewarm on government bonds and away from big tech shares to bargain-hunt for stocks in sectors long hit by fears of a downturn that has yet to materialise.

A blazing bond rally that began in October has stalled as strong data including last week's U.S. jobs numbers shake expectations for rapid monetary policy easing.

And while red hot stock markets remain vulnerable to any collapse in rate cut bets, some money managers believe sustained economic growth will buoy up small-cap shares, banks and cyclicals and could sweep cautious money back into equities.

«The surprise this year is probably that (economic) growth comes in once again,» said Evan Brown, head of multi-asset strategy and portfolio manager at UBS Asset Management.

Brown favours mid-sized U.S. stocks outside big tech and European banks. He prefers stocks to bonds.

Market gospel has long been that with