Heading into 2024, we communicated to clients that macro conditions looked significantly at odds with an imminent recession, with our growth estimates turning higher to reflect these odds. At the same time, markets looked fairly priced relative to this expected path, leading us to think that risk-controlled beta exposure to equities made the most sense in this environment, though opportunities for high reward-to-risk, leveraged alpha were limited.
Macro conditions largely confirmed these views, and as we approach the end of the first quarter of 2024, equity markets have risen 8.6% year-to-date. Given these moves, we think evaluating the conditions driving them is essential to understanding equities' future path. To this end, we share a note from our flagship Month In Macro.
For those unfamiliar, this publication shares our research team’s internal checkpoint process in evaluating the current state of the economy as it pertains to markets. The pages that follow will have familiar content for those who follow our work, but with the added benefit of connecting the dots across all the economic and financial data our systems use to make portfolio decisions. We share this note as we largely see conditions similar to when the note was written, with only modest changes to the outlook. This note also contains significant detail on the systematic strategies guiding our assessment of the market conditions, giving readers a sense of how we approach markets.
If you would like to gain access to our institutional or retail offerings, including our Month In Macro and much more, you can email info@prometheus-research.com for details. Until next time.