Outlook 2024

Financial markets started 2024 with a positive attitude, however we may expect a loss of enthusiasm in the short term.

Starting from the American indices, the major S&P 500, Dow Jones and Nasdaq 100 are now very far from their respective moving averages going to suggest caution despite the highs reached in the last trading session.

European markets continuing to fluctuate in a price range that began in December 2022 and by the time Americans start to overrun, they will most likely follow accordingly.

Asians bad, there is a lot of pessimism in the Far East due to a flat housing market and lower than expected GDP growth.

Investors are now very focused on trying to figure out when Central Banks will begin to cut their respective interest rates.

Before addressing this issue, we believe there is one main factor to be analyzed upstream: China is slowing down.

The Chinese market has for years represented an excellent outlet for global exports: What will happen when the demand for goods is no longer completely satisfied by the Chinese market?

If this demand were not absorbed by neighbouring countries (India, Vietnam, Cambodia) we could find ourselves faced with a possible slowdown of all those industries that gravitate and depend heavily on exports to the East.

For the European market, we have two big issues to address: on the corporate front, 2024 will see the refinancing of debt at higher rates. The March - April quarterly reports will certainly help to understand how company margins are holding up.

Added to this scenario are the war in Ukraine and the conflict in the Middle East: lands that are fundamental for the production and transport of raw materials.

Situations of instability that could lead to an increase in the costs of raw materials and increases in inflation.

As we can understand, there are many (perhaps too many) issues to be taken into consideration for 2024 and we are not surprised that the Central Banks are very cautious and we are in a stalled position also taking into account the American presidential elections in November.

We conclude with the financial markets expecting a fall in Q1 and Q2 2024 and then regain strength in the second half of the year.

Market brief is part of OTB NEWS