What investors can expect for 2024 | Northern Trust Asset Management (2024)


MarketScape · 01.22.24

Rate cuts and lower inflation likely will accompany slower economic growth and a rise in global political risks in 2024 — meriting some caution on equities.

  • Markets & Economy
  • Multi-Asset Insights
  • Fixed Income Insights
  • Equity Insights

Key Points

What it is

We give our take on the forces likely to move markets this year: the economy, inflation, central bank rates and global political risks.

Why it matters

A slowing economy and political tension could spark volatility, but falling interest rates and inflation may support markets.

Where it's going

U.S. equities appear somewhat pricey for a slowing economy, meriting caution by investors. We see central bank cuts around mid‑year.

In 2024, we see inflation and interest rates declining across the globe, and a resilient U.S. consumer likely helping to avoid a recession. Global political risks have risen with the growing conflict in the Middle East and continued war in Ukraine. Further, political polarization is driving contentious elections worldwide. European stocks face a challenging environment and U.S. equities, though more promising, appear expensive. As a way to help manage these risks, high yield bonds could prove a good fit for 2024. Let’s take a closer look.

Lower inflation will likely trigger the reduction of interest rates globally in 2024. Supply-chain disruptions from the pandemic have largely ended, causing goods-related inflation to retreat. However, housing-related inflation and wages continue to rise, contributing to stubborn services inflation. We expect that housing related inflation will likely soften this year, triggering an overall reduction in U.S. inflation. U.S. rate cuts may start around mid-year. European central bankers likely will want to be certain of having conquered inflation before reducing interest rates. Meanwhile, U.K. inflation risks remain elevated.

Forward-looking markets responded to declining inflation and the promise of AI with a global equity rally last year. While US large caps surged more than 26% in 2023, earnings stayed flat, and therefore expanded. Thus, U.S. large caps merit some caution. Global markets followed a similar pattern, though to a lesser extent.

Declining inflation and rate cuts will likely come with a slowing economy and political unrest that may globally. In this environment, high-yield bonds look promising as credit quality is high and default risks remain low..


The process of determining the value of an asset based on the analysis of variables related to investment returns or comparisons with similar assets.

Main Point

We expect lower inflation, central bank rate cuts and a soft economic landing to support markets this year. But with a slowing economy and tense global politics overhanging the market, we believe 2024 will especially reward investors who manage their portfolio risks well.

Related Content

Why Returns of Similar Growth and Low Volatility Indexes Varied So Widely

  • Read Now
  • Save

What investors can expect for 2024 | Northern Trust Asset Management (1)

Portfolio Manager

Anwiti Bahuguna, Ph.D., is chief investment officer of global asset allocation for Northern Trust Asset Management. She is responsible for managing investment performance, process and philosophy for multi-asset strategies globally. Anwiti leads NTAM’s strategic asset allocation, tactical asset allocation and capital market assumptions, and oversees the portfolio construction group and multi-manager business.

Read Bio

Contact Us

Interested in learning more about our expertise and how we can help?


For Asia-Pacific (APAC) and Europe, Middle East and Africa (EMEA) markets, this information is directed to institutional, professional and wholesale clients or investors only and should not be relied upon by retail clients or investors. The information contained herein is intended for use with current or prospective clients of Northern Trust Investments, Inc (NTI) or its affiliates. The information is not intended for distribution or use by any person in any jurisdiction where such distribution would be contrary to local law or regulation. NTI or its affiliates may have positions in and may effect transactions in the markets, contracts and related investments different than described in this information. This information is obtained from sources believed to be reliable, its accuracy and completeness are not guaranteed, and is subject to change. Information does not constitute a recommendation of any investment strategy, is not intended as investment advice and does not take into account all the circ*mstances of each investor.

This report is provided for informational purposes only and is not intended to be, and should not be construed as, an offer, solicitation or recommendation with respect to any transaction and should not be treated as legal advice, investment advice or tax advice. Recipients should not rely upon this information as a substitute for obtaining specific legal or tax advice from their own professional legal or tax advisors. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities. Indices and trademarks are the property of their respective owners. Information is subject to change based on market or other conditions.

All securities investing and trading activities risk the loss of capital. Each portfolio is subject to substantial risks including market risks, strategy risks, advisor risk, and risks with respect to its investment in other structures. There can be no assurance that any portfolio investment objectives will be achieved, or that any investment will achieve profits or avoid incurring substantial losses. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Risk controls and models do not promise any level of performance or guarantee against loss of principal. Any discussion of risk management is intended to describe NTI or its affiliates’ efforts to monitor and manage risk but does not imply low risk.

Past performance is not a guarantee of future results. Performance returns and the principal value of an investment will fluctuate. Performance returns contained herein are subject to revision by NTI or its affiliates. Comparative indices shown are provided as an indication of the performance of a particular segment of the capital markets and/or alternative strategies in general. Index performance returns do not reflect any management fees, transaction costs or expenses. It is not possible to invest directly in any index. Net performance returns are reduced by investment management fees and other expenses relating to the management of the account. Gross performance returns contained herein include reinvestment of dividends and other earnings, transaction costs, and all fees and expenses other than investment management fees, unless indicated otherwise. For additional information on fees, please refer to Part 2a of the Form ADV or consult an NTI representative.

Forward-looking statements and assumptions are NTI or its affiliates’ current estimates or expectations of future events or future results based upon proprietary research and should not be construed as an estimate or promise of results that a portfolio may achieve. Actual results could differ materially from the results indicated by this information.

Hypothetical portfolio information provided does not represent results of an actual investment portfolio but reflects representative historical performance of the strategies, funds or accounts listed herein, which were selected with the benefit of hindsight. Hypothetical performance results do not reflect actual trading. No representation is being made that any portfolio will achieve a performance record similar to that shown. A hypothetical investment does not necessarily take into account the fees, risks, economic or market factors/conditions an investor might experience in actual trading. Hypothetical results may have under- or over-compensation for the impact, if any, of certain market factors such as lack of liquidity, economic or market factors/conditions. The investment returns of other clients may differ materially from the portfolio portrayed. There are numerous other factors related to the markets in general or to the implementation of any specific program that cannot be fully accounted for in the preparation of hypothetical performance results. The information is confidential and may not be duplicated in any form or disseminated without the prior consent of NTI or its affiliates.

This information is intended for purposes of NTI and/or its affiliates marketing as providers of the products and services described herein and not to provide any fiduciary investment advice within the meaning of Section 3(21) of the Employee Retirement Income Security Act of 1974, as amended (ERISA). NTI and/or its affiliates are not undertaking to provide impartial investment advice or give advice in a fiduciary capacity to the recipient of these materials, which are for marketing purposes and are not intended to serve as a primary basis for investment decisions. NTI and its affiliates receive fees and other compensation in connection with the products and services described herein as well as for custody, fund administration, transfer agent, investment operations outsourcing, and other services rendered to various proprietary and third-party investment products and firms that may be the subject of or become associated with the services described herein.

Northern Trust Asset Management is composed of Northern Trust Investments, Inc., Northern Trust Global Investments Limited, Northern Trust Fund Managers (Ireland) Limited, Northern Trust Global Investments Japan, K.K., NT Global Advisors, Inc., 50 South Capital Advisors, LLC, Northern Trust Asset Management Australia Pty Ltd, and investment personnel of The Northern Trust Company of Hong Kong Limited and The Northern Trust Company.

Not FDIC insured | May lose value | No bank guarantee

I'm Anwiti Bahuguna, Ph.D., Chief Investment Officer of Global Asset Allocation for Northern Trust Asset Management, specializing in managing investment performance, process, and philosophy for multi-asset strategies globally. With a deep understanding of market forces, economic indicators, and investment strategies, I oversee strategic asset allocation, tactical asset allocation, and capital market assumptions. My role involves managing the portfolio construction group and multi-manager business.

In the provided article, the key concepts and insights can be summarized as follows:

  1. Market Analysis and Outlook:

    • The article discusses the forces likely to influence markets in 2024, including the economy, inflation, central bank rates, and global political risks.
    • It emphasizes that caution is warranted on equities due to the prospect of slower economic growth and increased global political risks.
  2. Economic Factors:

    • Anticipation of a slowing economy and political tension may contribute to market volatility.
    • The article suggests that a resilient U.S. consumer could prevent a recession, but European stocks may face challenges.
  3. Inflation and Interest Rates:

    • The expectation is for a decline in inflation and interest rates globally in 2024.
    • Housing-related inflation and wage increases are mentioned, with an anticipation of a reduction in overall U.S. inflation.
  4. Central Bank Actions:

    • Forecasting central bank rate cuts around mid-year, particularly in the U.S., with European central bankers being cautious and awaiting a clear victory over inflation before reducing rates.
  5. Equity Market Analysis:

    • U.S. equities are considered somewhat expensive for a slowing economy, warranting caution among investors.
    • The article notes a global equity rally in response to declining inflation and the promise of artificial intelligence (AI) in the previous year.
  6. Investment Strategy Recommendations:

    • Given the environment of slowing economic growth and political unrest, high-yield bonds are suggested as a potential fit for 2024 due to their high credit quality and low default risks.
  7. Valuation:

    • Valuation is highlighted as a crucial aspect, involving the process of determining the value of an asset based on variables related to investment returns or comparisons with similar assets.
  8. Risk Management:

    • The importance of managing portfolio risks well in the face of a slowing economy and global political tension is emphasized as a key factor for investors in 2024.
  9. Portfolio Manager Information:

    • Anwiti Bahuguna, Ph.D., is introduced as the Portfolio Manager responsible for managing investment performance, process, and philosophy for multi-asset strategies globally.
  10. Disclaimer and Important Information:

    • The article includes a disclaimer with information directed to institutional, professional, and wholesale clients or investors.
    • It emphasizes that the information provided is for informational purposes only and should not be construed as an offer, solicitation, or recommendation for any transaction.

In summary, the article provides a comprehensive overview of the economic landscape, potential market trends, and investment strategies for 2024, with a focus on the expertise of Northern Trust Asset Management in navigating these complexities.

What investors can expect for 2024 | Northern Trust Asset Management (2024)


Top Articles
Latest Posts
Article information

Author: Rubie Ullrich

Last Updated:

Views: 6166

Rating: 4.1 / 5 (52 voted)

Reviews: 91% of readers found this page helpful

Author information

Name: Rubie Ullrich

Birthday: 1998-02-02

Address: 743 Stoltenberg Center, Genovevaville, NJ 59925-3119

Phone: +2202978377583

Job: Administration Engineer

Hobby: Surfing, Sailing, Listening to music, Web surfing, Kitesurfing, Geocaching, Backpacking

Introduction: My name is Rubie Ullrich, I am a enthusiastic, perfect, tender, vivacious, talented, famous, delightful person who loves writing and wants to share my knowledge and understanding with you.