So far this year US activity data has continued to be on the strong side of consensus, supporting the view that the economy may not be slowing as much as many had started to believe. This report highlights the key signposts we are watching to confirm a relatively gradual deceleration in the US economy, in line with our base case for a soft landing.

Over the past 3 months, there has been a broad-based rally in stocks, with valuations expanding across most sectors. This broad rerating suggests the market may be less forgiving of companies that miss earnings expectations in the upcoming reporting season. In this report, we discuss how investors can prioritise stocks to navigate this potentially volatile environment.

Australia’s headline CPI rose by 0.6% in the fourth quarter, below consensus expectations of a 0.8% increase. While inflation is still too high, this inflation result is a welcome outcome after many quarters of very high inflation and the previous quarter’s upside surprise.

James Hardie (JHX) has delivered impressive returns in the past 12 months. However, several factors keep us cautious this year. The recent expansion of JHX's margins was largely driven by a confluence of tailwinds that are losing momentum. Margins look to have peaked and valuations look high considering rising downside risk to margins.

Global equities have eased back in January after last year’s late surge. The first few months of 2024 could be characterised by range trading as excessive optimism is worked off as central banks hold the line on interest rates. However, equities should ultimately benefit from rate cuts later in the year, lower bond yields and the anticipation of stronger growth late in the year and in 2025.

The macro environment has been key for Australian equities over the past 11 months. The inflation outlook, interest rates and bond yields have been an integral part of varied performance of sectors and stocks in 2023. In this report, we show that 2024 should be no different.

Global equities have delivered strong returns this year, led by the tech-heavy US market. Both the US economy and the US earnings cycle have been better than feared. In this report, we discuss how these and other factors play into the investment market outlook for 2024.

Amidst a climate of heightened confidence, risk assets are rallying, underpinned by a broader improvement in global risk sentiment. Investors are increasingly optimistic that policymakers will orchestrate a soft landing in 2024, a sentiment that gains support from recent economic data releases.