Once again?
This adage comes to mind in January, as this first month of 2024 saw the pursuit of some of the trends seen last year, either with rising long term rates, or the continued slide of the Chinese economy, not to mention reinforcing concentration of the US market around the “Magnificent Seven”. While the start of the year might suggests that, in many respects, 2024 is shaping up to be a repeat of 2023, the underlying situation looks very different: Central bankers have pivoted, and even if investors’ rate cuts expectations were overly ambitious late last year, the direction is clear. The still-dominant “Magnificent Seven” group seems less impressive individually. Finally, with the events in the Red Sea and the first elections of the year, January marks the return to centre stage of political and geopolitical risks that we will have to factor more in our investment thinking in 2024. We are detailing these ideas in this newsletter.
