Expectations for 2024: Rates and recessions(?) are key Expectations for 2024: Rates and recessions(?) are key Expectations for 2024: Rates and recessions(?) are key

Expectations for 2024: Rates and recessions(?) are key

Søren Otto Simonsen

Senior Investment Editor

2023 was an interesting year in the financial markets. The long-awaited recession was nowhere to be found while interest rates kept climbing, AI hype grew, and gold and oil came into focus. As we enter 2024, the big questions revolve around whether we will see a recession in the new year and what actions that will require from central banks. Add to that increasing macro-political uncertainty as the Ukraine and Gaza conflicts continue and a host of elections in, for example, the US and UK, and we have a 2024 where it seems like anything can happen in the financial markets.

To help you get the best possible start to the year, we've asked our asset class experts – in short – what the most significant event in 2023 was and how they see 2024 in terms of performance, trends, and what investors should look out for within their asset class.

Biggest events in 2023

Equities by Peter Garnry

"The snowballing hype cycle around generative AI systems such as ChatGPT, which has pushed the S&P 500 index concentration to the highest on record."

Bonds by Althea Spinozzi

"A buoyant economy in the U.S. was by far the biggest surprise of 2023. That enabled the Federal Reserve to hike rates beyond markets’ expectations."

Forex by Charu Chanana

"A delayed recession was by far the biggest surprise of 2023, and how long the higher-for-longer lasted."

Commodities by Ole S. Hansen

"The resilience of gold during a period of sharply rising bond yields and the oil market battle between OPEC and speculators looking for lower prices."

Expectations for 2024

in terms of 1) performance, 2) trends that will drive the market and, 3) what investors should look out for:

Equities by Peter Garnry

  1. "The big kicker in terms of performance is whether we get a recession or not, which I believe is around 50/50."
  2. "I expect that AI and green transformation will be key equity themes in 2024 with Fed policy rates and the Chinese economy being important factors."
  3. "Equity investors should pay attention to whether or not we get a recession as that will be a prime indicator of where the asset class is heading."

Bonds by Althea Spinozzi

  1. "I expect the US yield curve to continue to steepen and high-grade bonds to outperform risky assets."
  2. "A slowing economy, and less aggressive monetary policies will eventually benefit bond markets."
  3. "Fixed income investors should pay attention to inflation, growth, fiscal deficits, and how central banks react to an ever-changing economic and political environment."

Forex by Charu Chanana

  1. "The dollar is likely to come under pressure in 2024 as Fed formally signals a dovish pivot, but we need to see how growth outside the US transcends."
  2. "Carry trades have been a big focus in 2023, but global rate cut cycles will make carry a less attractive forex strategy in 2024."
  3. "A wild card next year is geopolitics, especially conflicts and elections, where voting against the incumbent seems to have become a norm and that could have ramifications for forex."

Commodities by Ole S. Hansen

  1. "2024 could be the year of the metals, not least gold, silver and copper, driven by lower bond yields, rate cuts and supply disruptions."
  2. "The economic outlook for China and the US and whether the US will see a soft or hard landing is key for commodities such as energy."
  3. "Investors should be aware that commodities with tight supply can rise even if the economic outlook looks less rosy."


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