My two cents "Investors View on the Global Market and Projections for 2024-2025"
There has been lot of discussion around on market outlook, risk and whats next? I have done some research on different reports and here is my two cents:
The global economic outlook for 2024-2025 presents a mixed picture, characterised by cautious optimism amidst ongoing uncertainties.
?Current Investor Sentiment
Investors currently view the global market as being in a state of transition, shaped by various macroeconomic factors:
1. Monetary Policy Adjustments: Central banks across developed markets are expected to conclude their tightening cycles by the end of 2023. In 2024, a gradual easing of interest rates is anticipated, particularly if inflation continues to decline towards target levels. However, there is a possibility of sustained higher rates if inflation proves sticky. For instance, in the U.S., the Federal Reserve is likely to begin reducing rates in the third quarter of 2024, with expectations of lower yields and steeper curves throughout the year
J.P. Morgan Research] https://www.jpmorgan.com/insights/global-research/outlook/market-outlook
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2. Growth Projections: Global economic growth is projected at 3.2% in 2024, with a slight increase to 3.3% in 2025. While developed economies may experience muted growth, emerging markets and developing economies are expected to show stronger resilience, supported by fiscal measures in countries like China and continued recovery in sectors such as services.
(IMF) World Economic Outlook Update, July 2024: The Global Economy in a Sticky Spot
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3. Sectoral Insights: The commodities market is expected to remain relatively stable. For example, oil prices are forecasted to remain flat, with modest demand growth driven by emerging markets and a stable U.S. economy. However, the energy sector could see fluctuations depending on production decisions by major players. J.P. Morgan Research https://www.jpmorgan.com/insights/global-research/outlook/market-outlook
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?Projections and Expectations
1. Regional Growth Variations: Growth prospects differ significantly across regions. Central Europe, for instance, is forecasted to grow faster than Western Europe, with countries like Poland and Romania leading the way due to a convergence premium and attractive labor costs for investors
Deloitte Insights https://www2.deloitte.com/us/en/insights/economy/global-economic-outlook-2024.html. Conversely, South Africa and other parts of Sub-Saharan Africa face slower growth due to structural challenges like electricity shortages and high inflation rates.
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2. Inflation Trends: Inflation is expected to moderate across developed markets, but there are concerns about its persistence in some areas. Services inflation remains a particular challenge, which could impact the speed at which central banks move toward more accommodative monetary policies.
World Economic Outlook Update, July 2024: The Global Economy in a Sticky Spot
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3. Investment Themes: Key investment themes for 2024 include navigating the risks associated with geopolitical tensions, adapting to evolving regulatory landscapes, and focusing on sectors poised for growth, such as technology and green energy. Additionally, investors are likely to seek opportunities in sectors with lower valuations but strong fundamentals, as well as in regions that offer better growth prospects due to structural advantages.
(State Street Global Advisors) Global Market Outlook 2024]
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While the global market outlook for 2024-2025 presents several opportunities, it is accompanied by notable risks, such as potential inflationary pressures, geopolitical tensions, and varying regional growth dynamics. Investors are advised to remain vigilant and diversify their portfolios to navigate these uncertainties effectively. So no easy money flowing in the market and with that, corporates are also very cautious about their investment and growths. Hopefully market should establize around the same time next year given all the other factors mentioned above speak in our favour.