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Annual & Mid-year Outlook | Economy | Asset Allocation | Equities | Fixed Income

Wealth Outlook 2024 | At a glance

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Our View

The global economy looks set for further recovery, with investor expectations resetting upward. We see potential portfolio opportunities near and long term. Long-term valuations suggest this may be a good time to build or add to globally diversified core portfolios across asset classes. In 2024, we see broadening equity performance. US small - and mid-cap growth shares with solid balance sheets among the potential opportunities.

Asian economic growth should improve in 2024, as we expect abating headwinds from high inflation, US policy tightening and China’s slowdown. We see opportunities in Japanese equities and currency, India’s longer-term development, as well as some sectors in China as its policies take hold to dig its economy out of a deep slump.

We seek portfolio income and diversification, and are advocating clients consider a 60:40 approach to equities and bonds. In this edition, Citi has included its high-conviction list of both core and opportunistic opportunities from around the globe, across sectors, for investors to consider. The opportunity to also add income via intermediate- term US Treasury and quality USD corporate bonds, potentially locking in peak interest rates, is now.


Slow then grow: Investing in the markets' big reset — Our expectations

  • Global GDP growth slows to +2.2% in 2024, strengthens to +2.8% in 2025
  • Despite slowdown, no broad-based economic collapse
  • US to lead the world in this “slow then grow” pattern
  • The US Fed is done raising interest rates, likely to cut moderately in 2024
  • US inflation to dip to 2.5% by end-2024
  • 10-year Treasury yields set to drop from 5% to c. 3.75%
  • Weaker US dollar to help Europe and Asia to grow after “slow”
  • Global earnings per share up 5% in 2024 and 7% in 2025
  • Main risks: further supply shocks or deeper weakening in China
  • Elections, geopolitics may cause investor anxiety without changing markets’ course


S&P 500 Consensus EPS by sector


Our top 10 high-conviction opportunistic Investments

We believe a long-term core portfolio should contain about 85% of a client’s wealth outside of their business assets and homes. An opportunistic portfolio can perhaps complement these holdings, seeking to strengthen diversification, potentially improve risk-adjusted returns or both. In Wealth Outlook 2024, we detail the following opportunistic ideas:

  1. Semiconductor equipment makers
  2. Cybersecurity shares
  3. Western energy producers, equipment and distributors
  4. Copper miner equities and clean energy infrastructures
  5. Medical technology & tools companies
  6. Defense contractors
  7. Private capital asset management firms
  8. The Japanese yen and yen-denominated tech and financials
  9. Private credit and structured debt securities
  10. Normalization of the US yield curve


Unstoppable trends are changing the world

Unstoppable Trends are long-term phenomena that are transforming how we live and do business. We seek portfolio exposure to these powerful forces.

AI-propelled digitization

We expect 2024 to see major AI buildout amid easier financial conditions. We favor semiconductor equipment, robotics, drug discovery and cybersecurity equities.

How OPEC is fueling the sustainable energy transition

By boosting oil prices, the world's most powerful energy cartel is incentivizing the sustainable energy transition. We seek near-term income from western traditional energy related firms; copper related investments vital to the transition; financially robust green energy firms longer term.

Increasing longevity and healthcare innovation

As human aging and technological advances persist we identify attractively valued healthcare investments such as medical technology and tools firms and value-based care providers that have underperformed pharmaceuticals.

G2 polarization: The global technology industry

As global tech supply chains bifurcate, we build exposure to both sides' technological champions; agile supply chain fragmentation beneficiaries, with many in the likes of Vietnam and Mexico; US, Japanese and European robotics and AI-powered logistics suppliers; and industrial real estate trusts owning factories and warehouses both sides of the Atlantic.

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