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2024 Market and Economic Outlook

Welcome back to Overtime. Lumpy down Wall Street, the Nasdaq posing barely in the green. Here to share what we can expect from the market and the broader economy in 2024 is Mercer’s U.S. Chief Investment Officer. Thanks for coming back.

Allocation Strategy

This year, Mercer is allocating away from U.S. equities and towards emerging markets. The decision is based on the amazing performance of emerging markets in 2023 and the potential for continued growth in 2024. Areas that have been sold off, such as the office sector, are seen as undervalued and providing opportunities for growth.

Interest Rate Expectations

In terms of interest rates, it is expected that the Federal Reserve will not raise rates significantly in 2024. This could lead to lower inflation and potentially impact equity markets, but Mercer believes that equities will remain relatively stable in the face of these changes.

Investment Opportunities

Mercer also sees opportunities in AI technology, fixed income, and private markets. High-yield global fixed income and value plays in private markets are seen as attractive options for long-term asset owners.

Long-Term Investment Thesis

Mercer maintains a focus on long-term investments, including infrastructure, real estate, and distressed opportunities. These are seen as long-term plays that can provide value over time.

Outlook and Risks

Mercer’s base case does not include a recession in 2024, but there are potential risks to consider, such as 60 countries having elections this year. The overall outlook is one of cautious optimism, with a focus on strategic and tactical allocation of funds.

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