This week we discuss the shift to Emerging Markets (EM), play-by-play from the 2024 Global Industrials Conference and 30 breakthrough technologies that can change the game.
Michael Hartnett points out that the shift into Emerging Market (EM) and eurozone equities is more remarkable, with movement into EM equities the most in 7 years.
Similarly, the net percentage expecting higher global economic growth and profit growth is the highest since January ’22. U.S. commercial real estate is seen as the most likely source of a credit event and higher inflation is seen as the biggest tail risk, a change from January, when geopolitics and hard landing were bigger concerns.
The view from over 75 companies at the 2024 BofA Global Industrials Conference was broadly constructive.
China demand was a glaring weak spot noted by European industrial companies. Aerospace & Defense companies reported strong order momentum. U.S. industrials emphasized positive demand sentiment but lingering excess inventory. Most U.S. industrial companies expect pricing power to offset higher labor inflation. U.S. construction companies see better housing and infrastructure support into 2025. The commentary was consistent with an improving earnings outlook. In parallel with the conference, Chief Global Quantitative Strategist Nigel Tupper thinks risks of an earnings downturn are melting away.
Did you know just 3% of companies created almost 100% of global net wealth in the past 100 years?
Disruption impacts markets and understanding which breakthroughs are on the cusp of commercialization has never been more important. Haim Israel and our Thematic Investing team declare artificial intelligence (AI) is now at a mass adoption inflection point, citing 30 breakthroughs to focus on. It’s not just about the impact of AI itself but how it intertwines with other technologies. AI is now being leveraged as a tool for other innovations, such as drug discovery and mining resources. The team even proposes we could soon live in a world where we go from a scarcity of resources to one of abundance. Perhaps the best news of all is that these investments in automation, AI and tech are reducing prices across the board, and increasing returns.