Barclays_Global_Macro_Thoughts_Too_fast_too_soon

Restricted - ExternalFOCUS16 September 2024Global Macro ThoughtsToo fast too soonAjay Rajadhyaksha+1 212 412 7669ajay.rajadhyaksha@barclays.comBCI, USMax Kitson +44 (0) 20 3555 2386max.kitson@barclays.com Barclays, UK Where noted in the source notes, the views expressed within this report are taken from previously published research. For further detail, including important disclosures and analyst certifications, please follow the links on each page and on page 8.This document is intended for institutional investors and is not subject to all of the independence and disclosure standards applicable to debt research reports prepared for retail investors under U.S. FINRA Rule 2242. Barclays trades the securities covered in this report for its own account and on a discretionary basis on behalf of certain clients. Such trading interests may be contrary to the recommendations offered in this report.Please see analyst certifications and important disclosures beginning on page 9.FICC ResearchGlobal MacroRestricted - ExternalCompleted: 16-Sep-24, 10:46 GMT Released: 16-Sep-24, 10:50 GMTRestricted - ExternalThe world at a glance•One of the best weeks for stocks, right after one of the worst•25 vs 50 is close this week, but we still expect 25•Global Outlook: the risk to a soft landing is a global trade war•Making sense of it all16 September 20242Restricted - ExternalThe Global Outlook: “As goes America, so goes the world” 1•US developments should be the main topic for markets in coming weeks 1oOn the macro side, concerns of a sharp U.S. slowdown have picked upoOn politics, November 5th could lead to very different economic policies depending on the winner•The labor market has slowed, but slowly; aggregate income is up over 4.5% in the past three months 1oQ2 growth was revised up to 3% mainly because consumption was stronger than expectedoThe virtuous cycle of income growth driving consumption driving the economy is still intact•Financial conditions have eased considerably since early August; this should help in coming months 1oWealth effects are very strong for US households, with household wealth up over $40trn since CovidoInflation fears have faded after several good prints, allowing the Fed to cut quickly if neededoSmall businesses and lower end consumers are more pessimistic; that’s not enough for a recession, in our view•The electoral map strongly favors a Republican Senate; the Presidential race is too close to call 1oMost of VP Harris’ proposals - higher corporate taxes, taxing unrealized capital gains, etc – need Congressional passageoIf VP Harris wins, we expect gridlock as the Senate stops her policy proposals from being realized1 Global Outlook: ‘As goes America, so goes the world’ (12 September 2024)16 September 20243Restricted - ExternalWe project global growth at 3.2/2.9% in 2024/5With US growth remaining resilient, we expect global GDP to remain solid; however, downside risks have intensifiedSource: Barclays ResearchGlobal Outlook: ‘As goes Ame