Investment Outlook: Soft landing will support share prices

10 September 2024 07:30

We are sticking to our forecast of a soft landing in the world economy, followed by a moderate increase in the growth rate. Future central bank key interest rate decisions will play a crucial role in ensuring the fulfilment of this forecast, with cuts of 1.5-2.0 percentage points expected before the end of 2025. In such an environment, we expect corporate earnings to increase by 7-10 per cent in the coming year. Meanwhile, a broader range of companies and sectors will be able to contribute to growth. We are continuing to maintain a slight overweight in risk assets, since valuation levels and positioning among investors are holding back our risk appetite.

“Over the past year, investors have gradually increased their risk-taking and broadened their exposure, primarily to equities. The recent bout of market turbulence has probably pushed back some risk-taking, which we see as a positive development that instead creates future potential,” says Fredrik Öberg, Chief Investment Officer at SEB’s Private Wealth Management & Family Office Division.

Allocation
We are approaching a point where we may carry out slightly larger changes both between and within asset classes. But first we want to see more evidence that the soft landing is materialising and that the current stock market consolidation will be replaced by a new positive trend and a broader upturn. We are ready, but we are not in a hurry to get ahead of the market. Instead, we want to see some confirmation of increased interest in emerging markets and small caps, for example, as well as an appreciating SEK that breaks out of the range against the USD where it has been oscillating for a long time. Regardless of this, our portfolios will continue to benefit from increased risk appetite and positive market performance.

Theme articles
This September 2024 edition of Investment Outlook also includes two newsworthy theme articles:
• Semiconductors, Part 2 – The backbone of digitisation
• The US elections ‒ An even battle focusing on taxes, tariffs and family policy

You will find the full report, plus a video, at www.seb.se/investmentoutlookreport.

For further information, contact:
Fredrik Öberg, CIO, Private Wealth Management & Family Office, SEB
+46 70 767 6179
fredrik.oberg@seb.se

Press contact:
Petter Brunnberg, Head of Media Relations & External Communication
+46 70 763 5166
petter.brunnberg@seb.se

SEB is a leading northern European financial services group with international reach. We exist to positively shape the future with responsible advice and capital, today and for generations to come. By partnering with our customers, we want to be a leading catalyst in the transition to a more sustainable world. In Sweden and the Baltic countries, SEB offers financial advice and a wide range of financial services. In Denmark, Finland, Norway, Germany and the United Kingdom, we have a strong focus on corporate and investment banking based on a full-service offering to corporate and institutional clients. The international nature of SEB's business is reflected in our presence in more than 20 countries worldwide, with around 18,000 employees. At 30 June 2024, the Group's total assets amounted to SEK 4,152bn while assets under management totalled SEK 2,666bn. Read more about SEB at sebgroup.com.