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Franklin Templeton (FT) identifies AI (Artificial Intelligence), health and energy as promising sectors in the US market.
Explaining what makes them lucrative, FT said that AI is a key pillar of the digital transformation that is driving significant disruption in multiple industries while spurring new growth. There are opportunities for companies to increase productivity, lower costs and ultimately drive competitiveness in this era of generative AI.
On the other hand, health care is backed by multidecade demand trends from an ageing population worldwide and energy appears lucrative as we move towards more renewable and sustainable energy platforms.
Overall outlook of the US economy
FT believes that the Fed’s interest-rate tightening cycle is nearing its end and it is cautiously optimistic that the US economic strength is sustainable.
It said, “We are mindful of the potential lagging impact of the Fed’s rate increases on economic growth, but we remain cautiously optimistic that the US economic strength is sustainable.”
Further FT looks at the year 2023 as the year of high asset correlation.
It explained “In broad terms, we continue to see consumers and corporations adjust to the changing economic environment, particularly in highly cyclical segments of the market. We believe 2023 will be a year when idiosyncratic factors will drive returns - as opposed to macro factors, which may lead to high asset correlation.”
