⚡ Is the Bond Market Set for a Comeback Next Year?
Macro Mornings
New here? This is part of a series designed for those who don't want to miss out on any market news. I cover all the crucial market developments that the community needs to know. Feel free to catch up on previous emails here if you'd like to start from the beginning!
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GLOBAL MARKET ROTATIONS: A BALANCING ACT
Mixed Sector Performance: Technology and healthcare sectors grew by 8-10% year-to-date, while energy and industrials lagged behind with modest gains of 3-4%, reflecting the ongoing market rotations driven by inflation.
Central Bank Watch: Expectations for two to three interest rate hikes in 2024 across developed economies continue to shape investment strategies, with analysts comparing this to the 2017 rate hike cycle where markets adjusted gradually.
STRATEGIC ASSET ALLOCATION FOR 2024: PLAYING THE LONG GAME
Equities Remain Favored: Despite headwinds, equities are expected to deliver returns in the range of 6-8% in 2024, with tech and healthcare leading the charge, compared to lower returns in fixed income.
Bond Market Pressures: The bond market continues to underperform, with yields sitting around 4%, a level not seen since 2010, but selective opportunities exist in high-quality corporate bonds offering better risk-adjusted returns.
SECTOR FOCUS AND MARKET PROJECTIONS
Energy Prices Stabilizing: After rising by 30% earlier in the year, energy prices are now expected to stabilize, easing inflationary pressures in emerging markets and improving global trade conditions.
ESG Investments Gain Momentum: Investments in ESG-focused companies are projected to grow by 15% annually through 2025, driven by both investor demand and regulatory incentives across Europe and North America.
Alessandro
Founder of Macro Mornings
Disclosure
This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. This material has been prepared for informational purposes only. Any forecasts contained herein are for illustrative purposes only and are not to be relied upon as advice or interpreted as a recommendation.