Counterpoint 2023 <br/>mid-year investment outlook

Counterpoint 2023
mid-year investment outlook

The divergence of growth is becoming evident across regions, and we will now likely see the emergence of asynchronous market cycles.
A new market cycle: Seizing opportunities and managing risk

As we reach the midpoint of 2023, it's worth revisiting the predictions we made earlier in the year. Specifically, our three key macro calls that would take place around Q2: a peak in inflation (starting with the US), a pivot in central bank interest rate policy (starting with the US Federal Reserve, Fed), and a pick-up in China's growth. We refer to these as “the three Ps”.

The macro rationale behind these calls was based on the expectation of a recession in developed markets due to monetary tightening, which would curb inflation and lead central banks to pause rate increases. Meanwhile, a recovery would gain momentum in China, where there is no inflation problem but, rather, central bank stimulus and reopening.

So, were our predictions right? Yes, partly. Inflation is showing clear signs of moving past the peak (in the US at least), leaving the door open for the Fed to pause its interest rate hiking cycle, and China’s growth has accelerated sooner -though perhaps less strongly - than expected and recent indicators point to slower progress. However, the prediction of a developed market recession has not yet come to fruition. Developed markets have proven to be more resilient than expected – the Eurozone and the UK in particular – thanks largely to energy disinflation and a mild winter, despite periods of weak growth. However, given the lagged impact of past interest rate hikes and the credit squeeze we envisage, a mild recession in the US now looks more likely in the second half of this year.

So, has our outlook changed as we look ahead to the rest of the year and beyond? Not a huge amount. We continue to believe we will see a divergence of growth and the emergence of new market cycles, driven by the so-called “three Ps”. We think the Eurozone and UK are probably where the US was six months ago, with inflation yet to peak convincingly and central banks looking to continue to raise rates – although not for long. Therefore, the balance of risks is skewed towards more European Central Bank and Bank of England hikes vs Fed.

We also think the currency outlook is unlikely to shift significantly over the next couple of quarters. We believe the US dollar (USD) remains overvalued and the Fed pausing rates could lead to some USD weakness. As the Fed pauses, the real interest rate differential between the US and the Eurozone/UK should diminish. The euro and pound sterling should strengthen vs the USD, though moderately given weak domestic growth. 

When it comes to the market landscape, our overall stance is also largely unchanged. Relative to our long-term asset allocation, we still prefer allocating slightly more to high-quality bonds and slightly less to equities and credit, given market uncertainty and that we think the peak in interest rates is in sight. So, rather than an overhaul of our asset allocation, we’ll continue to make tweaks as trends and risks emerge. 


Daniele Antonucci
Chief Economist & Macro Strategist


Gerwin Wijnia
Chief Investment Officer


Our three key macro calls that would take place around Q2: a peak in inflation (starting with the US), a pivot in central bank interest rate policy (starting with the US Federal Reserve, Fed), and a pick-up in China's growth. We refer to these as “the three Ps”.
How our worldview is changing
The West is slowing with bouts of financial instability, while the East is accelerating. Market volatility resurfaces every now and then and a shallow recession is still likely in the US. China and Japan have more room to continue to rebound. Contrary to our initial expectations, the Eurozone and UK appear to have avoided an outright recession due to receding energy risks...
Hoe onze blik op de wereld verandert
Belangrijkste macro- en marktvooruitzichten
Key macro and market views
  • US inflation has moved past the peak, and the US Federal Reserve will likely pause rate hikes

  • Eurozone/UK inflation and rates lag the US

  • China’s reopening and stimulus looks set to continue
Our flagship portfolio positioning
We have made two key calls heading into the second half of the year: increasing exposure to US investment grade bonds (hedged) and European minimum volatility stocks.

Our increased US investment grade (hedged) bond exposure has been funded by a reduction in our exposure to European and UK investment grade bonds...
Positionering in portefeuilles


Please provide us with some details
and you will get our key insights in your inbox.

Dit document is bedoeld als marketing materiaal en is uitsluitend bestemd voor de geadresseerde(n). Dit document is opgesteld door Quintet Private Bank (Europe) S.A. (“Quintet”), een vennootschap opgericht naar Luxemburgs recht. Quintet is gevestigd aan Boulevard Royal 43, L-2449 te Luxemburg en is ingeschreven in het Luxemburgse ondernemingsregister (Registre de Commerce et des Sociйtйs) met nummer B 6.395. Quintet staat onder toezicht van de ECB en de CSSF (Commission de Surveillance du Secteur Financier).

Dit document heeft uitsluitend een informatief karakter, vormt geen individueel (fiscaal of beleggings) advies en beleggingsbeslissingen kunnen niet uitsluitend gebaseerd worden op dit document. In geval een product, dienst of advies wordt genoemd, kan dit alleen worden gezien als samenvatting en nooit als de volledige informatie. Alle (fiscale of beleggings) beslissingen op basis van de genoemde informatie zijn voor uw rekening en risico. U dient zelf te (laten) bepalen of het product of de dienst voor u geschikt is. Quintet en haar werknemers kunnen niet aansprakelijk worden gehouden voor verlies of schade die voortvloeit uit het gebruik van (een deel van) dit document.

Dit document is gebaseerd op algemeen bekende en/of door ons betrouwbaar geachte bronnen. Hoewel alle redelijke zorg is betracht ten aanzien van de juistheid en volledigheid van de gegevens, kunnen wij niet aansprakelijk worden gehouden voor de inhoud van dit document, voor zover het op die bronnen is gebaseerd.

Beleggen brengt risico’s met zich mee en de waarde van beleggingen kan fluctueren. In het verleden behaalde resultaten bieden geen garantie voor de toekomst. Valutaschommelingen kunnen van invloed zijn op het rendement.

De opgenomen informatie is aan veranderingen onderhevig en Quintet heeft na de publicatiedatum van de tekst geen verplichting om de informatie overeenkomstig aan te passen of daarover te informeren.

Quintet is houder van het auteursrecht op de inhoud van dit document, tenzij uitdrukkelijk anders is aangegeven. Het is niet toegestaan om de inhoud van dit document geheel of gedeeltelijk, op welke wijze dan ook, te vermenigvuldigen of verder te verspreiden zonder de voorafgaande schriftelijke toestemming van Quintet In het privacy statement op onze website staat hoe wij met uw gegevens omgaan (

Copyright © Quintet Private Bank (Europe) S.A. 2022. Alle rechten voorbehouden. Privacyverklaring.