Divergent Views: Global Banks Optimistic, US Companies Cautious on Recession Outlook

Global banks are no longer forecasting a U.S. recession for 2024, but companies and investors remain cautious due to tepid consumer demand. While investment bank analysts are optimistic about growth prospects, real money managers trust the more circumspect companies. Major banks predict constrained global growth in 2024 due to elevated interest rates, pricier oil, and a weakened China, but with low odds of a recession. Companies are describing demand as weak, soft, and sluggish, and are cutting inventories accordingly. Walmart and Dollar General have expressed caution about consumer spending, while Procter & Gamble remains optimistic. Fund managers are focused on whether the Federal Reserve can avert a recession while containing inflation. Surveys show that consumer spending has been cooling, and economists' probability of a U.S. recession within a year has decreased. Forecasts for 2024 are more conservative, with even the most bullish predictions expecting single-digit gains for U.S. stocks.