Global Markets Overview: May 2023

Portfolio priorities for a surprise-free future:

• Demand and supply conditions in the major advanced economies remain out of balance; inflation, interest rates, and growth are likely to remain volatile in 2023/24.
• Asset market pricing implies a rapid fall in inflation to central bank targets, cuts in policy rates, and only a moderate slowdown in economic and corporate earnings growth. We think this understates the potential for higher than expected inflation, higher than expected interest rates, and/or lower than expected growth.
• We believe diversity with downside protection and active management continues to be the best way to maximise the chance of investment success.