U.S. Election Jitters? Standard Chartered Diversifies to Ride the Wave

Standard Chartered Group announced that it is preparing for uncertainties such as U.S. interest rate cuts and presidential elections. The company plans to focus on risky assets while diversifying global stocks and portfolios.

On July 2nd, Standard Chartered Korea released its Second Half of 2024 Global Financial Market Outlook and Investment Strategy Report. The group’s investment strategy experts have determined that the main investment theme is adapting to the changes and the new future.

Although concerns about the U.S. Federal Reserve’s monetary policy dampened short-term investment sentiment in the first half, they reflected that the global stock market generally performed well due to expectations of an economic soft landing and disinflation. With interest rate cuts and the U.S. election approaching, they emphasized that finding more significant investment opportunities is crucial without going against the waves of change in the second half.

They suggested maintaining an increased proportion of stocks over cash and bonds, focusing on markets with growth potential, like the U.S. and India. They also recommended preparing for the new future while utilizing various assets like bonds, gold, and alternative investment strategies to have a balanced portfolio during volatile times, judging that the existing investment direction focusing on risky assets is still valid.

The bank predicted that the interest rate cuts by major central banks would continue in the second half. The U.S. Federal Reserve is also expected to lower interest rates during the second half based on easing inflationary pressures due to falling rental rates and a slowing employment market.

They anticipated that the policy would shift from inflation suppression to growth rate support. Regarding the U.S. election, they noted that the volatility of the S&P500 index is a short-term variable, showing a trend limited to a few weeks before and after the election. They advised investors to pay attention to macroeconomic and market fundamentals rather than short-term factors.