Q4 Investment Outlook

Discover the key themes set to drive markets and the investment implications.

Risks balanced

Was August just August? It seems not entirely. A jerky market correction in the middle of the US holiday season has been followed by another in the altogether more serious territory of September. There are reasons.

Whatever brand of landing you have your money on, the economy is returning to earth after five years in which abundant government support kept the global wheels turning. At the moment, we believe recent weaker data points are more likely to indicate a soft patch rather than a serious downturn, but investors are reacting. We are watching growth and labour market indicators closely for signs of further deterioration.

The overall picture is far from bleak. Markets and the global economy have proved consistently resistant since the pandemic and consumers all over the world are still spending. We believe the global economy is not headed for an imminent recession and see signs that we have a market rotation - rather than a sell-off - on our hands.

Three themes to watch in Q4

Our Investment Outlook highlights three key themes that we expect to dominate this quarter. Click on the link below to discover more as Global Head of Solutions & Multi Asset Henk-Jan Rikkerink discusses the potential economic and investment implications.

1. A bumpier path
The slowdown is within striking distance of a soft landing, but we expect inflation to be higher and more volatile than it was through the QE era. This kind of mid/late cycle environment usually produces positive returns, albeit with higher volatility.
2. The Fed strikes back
September’s cuts in US and other interest rate moves offer hope for a smoothing of the road. The scale of further monetary easing this year is still hanging in the balance, but policymakers are reacting and, freed from the fear of higher levels of inflation, they will continue to do so.
3. Global concerns
There are a complex set of geopolitical risks. The conflicts in the Middle East and Ukraine roll on, with no end in sight. The US election also beckons and it will be important to monitor implications for fiscal policy and China

Find out more

Asia Q4 Outlook: Go with the east wind

A dip in US growth will have an impact on Asia's own rates of expansion, but macro shifts will also provide room for the region’s policymakers to cut interest rates. With economic and geopolitical risks compounding outside of the region, a tactical and defensive posture could help investors make the most of these circumstances - and prepare for better days ahead.

Discover more

Soemthing
 

Stay informed

Subscribe to stay ahead of the curve with the latest thinking and market news from Fidelity.

Subscribe 
marketo form dynamically added