SCB Julius Baer optimistic about global markets in H2 2024, recommends diversification of investments into cyclical sectors amid economic recovery

SCB Julius Baer Securities Co., Ltd. (SCB Julius Baer) recently held an exclusive seminar titled “Market Outlook for the Second Half of 2024” for Ultra High Net Worth Individuals (UHNWIs). The seminar featured insights from Julius Baer, predicting a favorable turnaround in the global economy, often described as “Out of the Woods.” This period is seen as an opportune time to diversify investments across assets. The U.S. economy is expected to continue its solid growth, and a potential rate cut is anticipated in September. In addition, global trade is likely to benefit from the resurgence of the Chinese industrial sector. In terms of investment strategy, cash holding remains prudent, allowing for flexibility in allocating funds to other asset classes in the second half of the year. We continue to focus on investing in high-quality USD-denominated bonds and debt instruments in emerging markets. A greater emphasis on investing in cyclical stocks is recommended. When it comes to topics related to future generations, there are still positive prospects in sectors such as automation, robotics and cities of the future.

Peerapong Jirasevijinda, CEO of SCB Julius Baer Securities Co., Ltd., shared his insights on the global economic landscape in the second half of 2024, as per Julius Baer analysis. He noted that “the global economy is showing early signs of recovery, suggesting that we are coming out of the ‘woods’. This is a favorable time for strategic investment diversification. The US economy remains strong, supported by significant fiscal stimulus and a recovering labor market, which is supporting optimism about a potential rate cut in September. On the other hand, Europe and China, especially due to the difficult real estate sector, are facing economic headwinds. However, the measures taken by China to address domestic issues are expected to strengthen global trade and trigger a new cycle of manufacturing inventory build-up. The market correction observed in the second quarter creates an investment opportunity, especially as we approach the important event of the US presidential election on November 5, 2024.”

“From an equity perspective, we are taking a more cyclical investment approach, increasing our focus on industrial stocks while reducing our exposure to consumer stocks. Our focus is on high-quality mid-cap and Japanese stocks. Despite a strong domestic economy and the Federal Reserve’s high-rate policy keeping the USD strong, the JPY is likely to remain under downward pressure, and the Ministry of Finance’s interventions could potentially be unsustainable in the long term. Gold is expected to provide a reliable hedge against political uncertainty. On the Next-Generation theme, we remain positive on Automation, Robotics and Future Cities,” concluded Mr. Peerapong.