Equity markets are likely to remain choppy and rangebound in the near term amid uncertainty over the monetary policy outlook, though we see moderate upside in the year ahead. (UBS)

CIO sees moderate upside for global equities in the year ahead, and we think quality stocks—including the US IT sector—should be well placed to generate earnings in an environment of weaker growth.


Equity markets have rallied in 2023, helped by a resilient economy.


  • The S&P 500 has risen 19% year-to-date as of 24 November, despite a sharp rise in US Treasury yields over the course of 2023.
  • The US economy grew at a 4.9% annualized rate in the third quarter. Headline consumer price inflation slowed to 3.2% in October.
  • Enthusiasm for artificial intelligence-related stocks has also fueled the rally.

But global growth is likely to slow in 2024.


  • High interest rates are likely to curb US consumers' propensity to spend.
  • We expect European growth to remain subdued amid restrictive monetary policy.
  • China looks set to enter a “new normal” of lower growth. We forecast GDP growth of 4.4% in 2024 after 5.2% in 2023.

So, within equities, we recommend focusing on quality stocks.


  • Equity markets are likely to remain choppy and rangebound in the near term amid uncertainty over the monetary policy outlook, though we see moderate upside in the year ahead.
  • We favor quality stocks, including the US IT sector, which should be relatively well placed to generate earnings in an environment of slower economic growth.
  • Regionally, we like emerging market equities, and forecast 16%earnings growth for the MSCI Emerging Markets index in 2024.

Did you Know ?


  • Companies with “quality” attributes typically have strong returns on invested capital, resilient operating margins, and relatively low debt on their balance sheets.
  • The MSCI ACWI Quality Index has outperformed the MSCI All Country World Index by 1 percentage point over six-month periods since 2012 in which growth has been slowing but staying positive (as measured by the Atlanta Fed GDPNow survey)—the environment we expect in 2024.
  • Quality stocks also tend to be relatively resilient in periods of economic contraction, which should offer portfolio protection in case the economy slows more than we expect next year.

Investment view


We are neutral on global equities overall. We believe quality stocks, including the US IT sector, should be well positioned to grow earnings in an environment of slower growth in 2024. We also like emerging market stocks. Our December 2024 target for the S&P 500 is 4,700.


Main contributors - Vincent Heaney, Christopher Swann


Original report - What's ahead for equity markets in 2024?, 27 November 2023.