9 themes impacting the global economy

As discussed in Macquarie’s 2024 mid-year outlook, “remarkably resilient” is how the global economy has been described amid some strong pressures.

There were nine key takeaways from Macquarie at the mid-year junction:

1. Higher for longer, but the trend’s your friend: Globally, Macquarie believes there are hints that central banks will ease rates.

2. Modest reacceleration in growth to support risk assets: “Global growth has remained unexpectedly resilient” read the report. This is expected to continue into 2025, with central banks predicted to ease monetary policy.

3. US equity valuations are stretched, but conditions are supportive: A recession is unlikely, said Macquarie, considering many believe lower rates could be on the horizon.

4. Geopolitical risks remain high: Global trade has seen much volatility and could continue.

5. A positive, but underwhelming, Australian equity market: “The Australian equity market has underperformed,” said Macquarie. However, “while domestic growth is likely to be weak in Q2, we expect a rebound to commence for Q3, reflecting tax cuts and real wages growth.”

6. Supply issues are keeping the Australian housing market tight: The housing market is in a rut, with high prices, “failing” construction, and reduced borrowing capacity impacting heavily. “A tight rental market, lower household mobility and strong net overseas migration are all limiting the supply of properties listed for sale,” read the report.

7. US commercial real estate to bottom by end of the year: Property prices in the US have reportedly increased by 1 per cent this year. The commercial property sector across the country is expected to “finally bottom.”

8. Gold: keeping its shine: “Our commodity analysts have again raised their gold price forecasts and now expect the spot price to reach a quarter average peak of US$2,500/oz in 1H25, with single point highs comfortably above this,” said Macquarie.

9. Diversification remains the only free lunch: Diversification has never been more important, Macquarie said. “While we think equities will likely end the year higher, we also look to maintain exposures to less correlated strategies such as unlisted infrastructure, private markets (senior secured private credit and private equity) and hedge funds in order to diversify return streams and protect against tail risks.”

[Related: Economists remain firm on rate cuts this year]

Jack Campbell is the editor of Broker Daily. After graduating from the University of Wollongong in 2022, Jack began his journalistic career working on Broker Daily’s sister brand, HR Leader. In August 2023 he was made the news editor and worked alongside some talented journalists writing articles and recording podcasts.

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