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Quick Bites | Six themes to keep eyes on in 2024

January 24th, 2024 | Article
By: Paul Zwi

Markets unexpectedly rallied hard in 2023 and bullish sentiment became elevated. Australia’s share market rise, on the other hand, was relatively moderate.

Six investment themes to keep an eye on during 2024: 

  1. Strong US economic growth – as the world’s biggest economy enters 2024 with strong momentum, easier financial conditions and broadly strong fundamentals.
  2. Robust US growth – should lift corporate earnings but also keep the jobs market tight and drive above-target, sticky inflation.
  3. Official rates stay high, plateau longer than expected – central bank easing cycles disappointing markets, citing risks of premature easing.
  4. Most equity markets (including the US and Australia) are either fully priced or close to fully priced relative to long term historical averages, therefore dependent on profit growth to advance.
  5. Heightened geopolitical risks – with the polarising US presidential election in November, the war in Gaza/Israel, disruption to sea-borne commerce in the Red Sea, war in Ukraine, and persistent China tensions.
  6. On-going China deceleration intensifying risks for Australian exports – China’s structural challenges (over-investment, real estate crisis, demographic, deflation) are in danger of worsening.

Disclaimer: Clime Asset Management Pty Limited | AFSL 221146 | ABN 72 098 420 770.  The information provided in this post is intended for general use only. The information presented does not take into account the investment objectives, financial situation and advisory needs of any particular person, nor does the information provided constitute investment advice. Under no circumstances should investments be based solely on the information contained therein. Please consider the relevant disclosure document/s before investing in one of our products. Investment in securities and other financial products involves risk. An investment in a financial product may have the potential for capital growth and income but may also carry the risk that the total return on the investment may be less than the amount contributed directly by the investor. Investors risk losing some or all of their capital invested. Past performance of financial products is not a reliable indicator of future performance or returns.