Citi Global Wealth Investments Releases Outlook 2023: Roadmap to Recovery: Portfolios to Anticipate Opportunities
December 08 2022 - 2:07PM
Business Wire
As a turbulent 2022 draws to a close, Citi
Global Wealth Investments predicts a shallow recession in 2023, but
believes that markets will begin to focus on 2024’s recovery
Citi Global Wealth Investments (CGWI) today released its Wealth
Outlook 2023 (Outlook) report, titled Roadmap to Recovery:
Portfolios to Anticipate Opportunities. Published twice yearly,
Outlook provides in-depth insights into the global economy and
financial markets for the year ahead and beyond. The latest
edition’s title reflects the investing journey that CGWI envisions
and the steps that investors should consider diversifying their
portfolios.
In 2023, CGWI predicts the weakest annual global economic growth
in forty years outside of the Global Financial Crisis and the COVID
shutdowns. The year ahead is likely to see:
- A shallow US recession and worse in some other places such as
the Eurozone
- A recovery in Chinese growth, by contrast, as pandemic
restrictions are relaxed
- US inflation continuing to ease, ending 2023 at around
3.5%
- The US Federal Reserve to start cutting interest rates by the
second half of the year
- A 10% drop in global earnings per share
Just as 2022’s global market turmoil reflected these forecast
conditions for the year ahead, investors will likely start to focus
on 2024’s recovery during 2023. With the current equity bear market
probably incomplete, CGWI enters the year positioned defensively,
but expects to pivot as the year progresses.
“Over time, the US stock market has never bottomed before an
associated recession has even begun, so we regard recent equity
upside as a bear market rally,” says David Bailin, Chief
Investment Officer and Head of Citi Global Wealth Investments.
“A year like 2022 can make holding excess cash seem tempting, but
the clear lesson of history is that this almost always leads to
missing opportunities when markets begin to recover. For 2023, we
reiterate the fundamental wisdom of keeping portfolios fully
invested, anticipating the opportunities that we expect.”
CGWI sees a likely sequence of potential opportunities,
including:
- Short-term US investment grade fixed income amid today’s higher
interest rate environment
- Defensive equities such as resilient dividend payers as the
bear market continues for now
- Non-cyclical growth equities to bottom before cyclicals once
the Fed pivots to cutting rates
- A subsequent entry point into more cyclical equities
- “Deep value” in select non-US assets and currencies once the US
dollar peaks
- Certain alternative strategies to position for distressed and
other opportunities following the recession
“The sharp declines across many asset classes in 2022 has left
long-term valuations more attractive,” said Steven Wieting,
Chief Investment Strategist and Chief Economist at Citi Global
Wealth Investments. “For the first time in several years, for
example, we see genuine portfolio value in fixed income. Short
duration US Treasuries present a compelling alternative to holding
cash.”
CGWI has also updated its case for “unstoppable trends,” the
powerful multi-year phenomena that continue to reshape business and
everyday life, as well as portfolios. These include digitization,
aging populations, the rivalry between the US and China and the
transition to clean and secure sources of energy. CGWI highlights
ways to seek exposure to these transformational forces in
portfolios.
To access the full report, summary versions, short videos and
other materials can be accessed here.
About Citi:
Citi is a preeminent banking partner for institutions with
cross-border needs, a global leader in wealth management and a
valued personal bank in its home market of the United States. Citi
does business in nearly 160 countries and jurisdictions, providing
corporations, governments, investors, institutions and individuals
with a broad range of financial products and services. Additional
information may be found at www.citigroup.com | Twitter: @Citi |
YouTube: www.youtube.com/citi | Blog: http://blog.citigroup.com |
Facebook: www.facebook.com/citi | LinkedIn:
www.linkedin.com/company/citi.
About Citi Global Wealth:
Citi Global Wealth is an integrated wealth management platform
that delivers a total wealth solution to clients across the wealth
continuum. Citi Global Wealth serves ultra-high-net-worth
individuals and family offices through Citi Private Bank, operates
in the affluent and high-net worth segments through Citigold® and
Citigold Private Client, captures wealth management in the
workplace through Global Wealth at Work and provides premium
banking and lending service for clients of RIAs through Citi
Alliance. Citi Global Wealth provides clients with a leading
investment strategies platform, which delivers traditional and
alternative investments, managed account strategies, best-in-class
research and investment guidance for all clients.
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