Global Banks See No Recession, US Companies Are More Circumspect

• Heading into 2024, analysts say the U.S. recession they'd been forecasting for two years isn't coming anymore. However, everyone else, from companies to investors, is still bracing for a slowdown caused by tepid consumer demand.
• The dissonance between the habitually bullish investment bank analysts and the more circumspect money managers is not new. What is different this time is the level of prudence and caution from some top companies as they outline their plans for next year.
• Real money managers are in no doubt about which side to trust. After months of being wrong-footed, sell-side analysts are a bit too bullish about growth prospects, Fed rate cuts, and a consumption recovery, they say.
• A year ago, many banks were forecasting a U.S. recession; however, consensus forecasts from major banks, including Goldman Sachs, Morgan Stanley, UBS, and Barclays, are for global growth to be constrained in 2024 by elevated interest rates, pricier oil, and a weakened China, but with low odds for a recession.
• The last two years have posed challenges for macroeconomic analysts attempting to reconcile the dynamics of a post-pandemic recovery, substantial global stimulus, and the stance of hawkish central banks.
• Despite indicators suggesting a slowdown or recession, the consensus on the likelihood of a U.S. recession within a year has shifted from consistently above 60% in 2022 and mid-2023 to around 45%.

(Source: Reuters)