Staying ahead, reaching beyond

Crisis-tested and safety-conscious? 

If investors have got used to anything in recent years, it’s unpredictability. Coronavirus, war, inflation: what moves the world moves the markets.

With each crisis, the need for safety automatically goes up. And this quite clearly isn’t in cash again. The inflation-induced fall in value that many had to contend with was too rapid. At the same time, US government bond yields reached levels even experienced investors had only heard about in hearsay. Will this “safe haven” therefore become the focal point for all anticipated returns in the foreseeable future?

2023 under review: the best guide for 2024

Global economic growth surprised many in 2023. The promised recession never materialized. But unexpected as this is, it cannot be the foundation for stable growth. Much of it will be remembered as a “one-off effect” and not repeated in 2024:

1. The robust US jobs market that was (still) impervious to increasing unemployment.
2. The bullish consumers who (still) had significant coronavirus savings
3. The US government that (still) found majorities to increase state spending
4. The industries that (still) invested in new supply chains to become more independent thanks to nearshoring or friendshoring
5. The crisis at smaller and medium-sized US banks that (still) prevented central banks from siphoning off liquidity from the system as planned
6. The debt situation in companies that (still) benefited from attractive interest rates on loans, but will gradually have to renew them

Recession the baseline scenario for 2024

The review of 2023, suggests a scenario in which a recession hasn’t been avoided but simply postponed – until the above-mentioned one-off effects gradually fade. Whether things turn out for the better or worse will depend on various factors that can promote or hinder economic growth.

• New bottleneck in energy supply
• China supporting its economy through fiscal policy
• Unexpectedly strong US consumption