2022 Mid-Year Outlook:
Economies recalibrated and what’s to come

Market outlook

Making sense in the land of confusion

At the halfway point of 2023, one thing is clear: Goldilocks is still nowhere to be seen. We still aren’t holding our breath for a return to the macro environment of the last decade. Indeed, headwinds for economic growth, such as high inflation, high interest rates and lower productivity, continue to support our thesis for a slowing economy.

Geopolitical Headwinds:
Unlikely to blow over

Soaring inflation gave central banks little choice but to hit the economy with the largest rate hikes in over 40 years throughout 2022.  We do not foresee a large default wave in 2023, as the refinancing calendar for the high-yield bond market will not be significant until 2025. We believe that if central banks are forced to maintain policy rates at these levels to rein in inflation, tighter financial conditions will be a headwind for business fundamentals in 2023. 

Financial Tightening:
No pain, no gain

Soaring inflation gave central banks little choice but to hit the economy with the largest rate hikes in over 40 years throughout 2022.  We do not foresee a large default wave in 2023, as the refinancing calendar for the high-yield bond market will not be significant until 2025. We believe that if central banks are forced to maintain policy rates at these levels to rein in inflation, tighter financial conditions will be a headwind for business fundamentals in 2023. 

Economic slowdown:
How broad, how deep?

How broad, how deep? Despite the clouds building in the economic backdrop, we believe that equity markets will begin to look through the valley of an economic slowdown towards the next business cycle. This will set up for a broad-based equity recovery later in the year. In the meantime, focusing on high-quality companies with near term earnings visibility and low sensitivity to economic growth can provide solid equity returns in the face of higher economic uncertainty.

Financial tightening:
Slowly at first, then all
at once

Aggressive monetary tightening left its mark in the first half of 2023. We believe it is highly likely that diminished credit availability will slow the economy through the rest of the year.

Economic slowdown:
Where the rubber meets the road

The global economy has been surprisingly resilient in 2023. We believe the fight against inflation will be a headwind for equities as a brewing economic slowdown weighs on earnings.

Geopolitical dynamics:
Fresh challenges
arise

The geopolitical headwinds of 2022 haven’t blow over. In fact, they’ve been joined by new ones involving China, namely its post-COVID re-opening, de-dollarization and ongoing trade disputes.

Asset mix recommendations


With peak inflation behind us, we believe the best opportunities in 2023
are now to be found in the relative safety of investment grade corporate bonds.

* Representing change of allocation recommendation from Mackenzie's 2023 Outloook, published in December 2022.


2023 Mid-year market outlook

Mackenzie’s Blue Book provides a near-term view of what the rest of the year holds for investors.


2023 Outlook event

Our CIOs and PMs discuss challenges and opportunities for the rest of 2023, and dive into our outlook and asset allocation recommendations.

June 20, 2023, at 1 p.m. ET



Podcast

Looking for insight into the markets for the rest of 2023? Hear the latest from our investment leaders, including co-CIOs Lesley Marks and Steven Locke.

 

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Long-term capital markets outlook

Mackenzie’s Orange Book includes expert insights to help investors stay focused on long-term returns.


Environmental outlook

Our sustainability experts weigh in on the challenges and opportunities in the environmental space.  

Meet our contributors


Lesley Marks, MBA, CFA

Chief Investment Officer, Equities
 

Mackenzie Operating Committee


Steve Locke, MBA, CFA

Chief Investment Officer, Fixed Income & Multi-Asset Strategies
 

Mackenzie Operating Committee

Dustin Reid, MBA

VP Chief Fixed Income Strategist

Mackenzie Fixed Income Team

Nelson Arruda, MFin., MSc., CFA

SVP Portfolio Manager & Team Lead

Mackenzie Multi-Asset Strategies Team

Konstantin Boehmer, MBA

SVP Portfolio Manager & Team Co-Lead

Mackenzie Fixed Income Team

John A. Cook, CIM

SVP Portfolio Manager & Team Co-Lead

Mackenzie Greenchip Team

Jules Boudreau, MA

Senior Economist

Mackenzie Multi-Asset Strategies Team

Justin Truong, CFA

Senior Manager

Mackenzie Investment Strategy

Fate Saghir

SVP Head of Sustainability & Marketing

Mackenzie Sustainability Team

Ying Du 

VP Head of Mackenzie Investments China 

Mackenzie Investments China

Natasha Stromberg

Director Sustainability & Adv Disclosure

Mackenzie Sustainability Team

Rebecca Francolini

Senior ESG Analyst

Mackenzie Sustainability Team

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