For 2022, Except for the Ukraine war, I predicted nearly everything. In 2023 I wasn’t very sure and many different things going on so Written but I wasn’t sure. so here I decided to write a post with full preparation for 2024.
Overall 2023, Inflation was a theme. Central banks were in action to control it and they successfully did. That was needed but side effects of that medicine were also visible. Bank crisis in the USA, the Heavy debt burden on many governments was visible. For the large part, Brent crude was below $85/ barrel. for small times it was above and as always voice of Oil hitting $150/ barrel start. but that is now impossible. Oil and other fossil fuels are now heading to their last leg. Many oil Producers know that and so some of them started investing for their future.
Interest rates didn’t move much in 2023 as they were already fast approaching where they should be.
So what I can see in 2024?
I see wars. China-Taiwan war is nearly sure. Ethiopia may or may not attack Eritrea. Venezuela’s war may also be highlighted. Israel war in Gaza I am sure, is heading towards Afghanistan USA. The simple reason is Gaza is the thickest city on the face of the earth. Difficult to do anything in such issues. Gurrila war if started, will be heavy for Israel. Plus due to many reasons, Benjamin Netanyahu is losing support in his nation. Only 23% of people vote for him. So whatever Growth and development happened, may lost.
2024 is a year of election. Many small and big nations are heading for election. India, Taiwan, Pakistan, the United States, Ukraine, and many others. So I am sure they will be a big factor. Will Donald Trump come back to power? Will Ukraine see peaceful elections? what will happen in Gaza? That will be questions for global equities as Insurance and oil are commodities.
2022 was the year of Rising interest rates. 2023 saw the effects of those high rates. 2024 may be the year of yields coming down. As the US GDP shows signs of inflation coming down, Jerome Powel may be thinking of reducing it. Even if not, the Federal Reserve reducing the size of its balance sheet is a big factor. All this increases the load of debt on governments. So Global debt crisis taking shape and already International monetary fund precautions government. But the issue is global and many aspects are not in the hands of small investors. So investing in Debt may also give its own risk.
Digital currencies are here to stay. Bitcoins are not going anywhere but fast transaction mechanisms may become a favorite.
In India, el nino may be proving headache as even after stopping Export price of wheat rice and sugar are not coming back lower. In all that Indian basmati lost its market to Pakistan. Pulses inflation has its place. not many countries have them as crops.
Lowering Yield may help the market but there are other risks that we can’t ignore.
