Quick Bites | Six themes to keep eyes on in 2024

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.

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