Opening Note
A brand new year grants us the opportunity to take a fresh look at our goals and aspirations to achieve the life we want for ourselves and our loved ones. This is also the time to review our investment plans as we study shifting events around us.
Entering 2024, where are central banks and the global economy heading after two years of high inflation and rate hikes? How would fresh geopolitical conflict and change in political leadership in important economies affect our investment decisions? What opportunities can you seize and what risks should you be wary of?
Last year, stock markets rode on groundbreaking developments in generative artificial intelligence and rallied strongly in the first half. At the same time, financial markets grappled with higher-for-longer interest rates, leading to market volatility in the second half.
For the first half of this year, geopolitical tensions will continue to cloud sentiment while the election cycle kicks off across Asia and in the United States. Interest rates are expected to stay high for now and the delayed impact of aggressive central bank rate hikes may start to slow the global economy. What is positive is that inflation is on its way down and should the economy slow too rapidly, central banks can support growth by cutting interest rates.
We are mindful of the ebbs and flows of market and political cycles, as well as the risks that accompany them. At the same time, we are excited to discover opportunities that can do well before these cycles turn.
With our latest market outlook and strategies on hand, our advisors and specialists are ready to help you find appropriate solutions for your investment plan. As we journey together with you towards your goals, I wish you a fruitful year ahead!
Jacquelyn Tan
Managing Director
Head, Group Personal Financial Services
2024 Global Outlook
Source: UOB PFS Investment Strategists
As we enter 2024, we have reasons for both optimism and caution. This is why you should begin the year anchored in a diversified portfolio. If you are looking for consistent income, this period of high bond yields may not last very long so think about bond funds and investment grade bonds. Another way to get income is from quality stocks that pay dividends. At the same time, it is important to be nimble and prepared to seize opportunities as they arise.
We are optimistic for three main reasons. First, inflation is expected to continue declining this year. Second, with inflation coming down, central banks may lower interest rates from the middle of the year. Lastly, an orderly global economic slowdown makes it more likely a deep recession is avoided.
Reasons for caution include the possibility of the delayed impact of rapid rate increases leading to a more severe economic downturn. The worry is central banks erring by maintaining high interest rates for too long to guard against inflation while ignoring the negative effects on the economy. The second concern is prolonged geopolitical tensions causing inflation to pick up again, compelling central banks to respond by either keeping interest rates high or by raising rates.
Politics will also provide distractions, with elections due in many parts of the world. Asia’s election cycle is unlikely to have a significant impact on regional financial markets. The November United States Presidential election is a different story although the full impact on markets will only become clear towards the end of the year and into 2025.
From the factors above, we think the global economy will slow further but in an orderly manner. Inflation will keep falling, while central banks will reduce interest rates from the middle of the year onwards.
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2024 Outlook
Learn more about the outlook for major economies, interest rates, stock and bond markets, major currencies and more.
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The information contained in this publication is given on a general basis without obligation and is strictly for information purposes only. This publication is not intended to be, and should not be regarded as, an offer, recommendation, solicitation or advice to buy or sell any investment or insurance product and shall not be transmitted, disclosed, copied or relied upon by any person for whatever purpose. Any description of investment or insurance products, if any, is qualified in its entirety by the terms and conditions of the investment or insurance product and if applicable, the prospectus or constituting document of the investment or insurance product. Nothing in this publication constitutes accounting, legal, regulatory, tax, financial or other advice. If in doubt, you should consult your own professional advisers about issues discussed herein.
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Credits
Managing Editor
- Winston Lim, CFA
Singapore and Regional Head,
Deposits and Wealth Management
Personal Financial Services
Editorial Team
- Abel Lim
Singapore Head,
Wealth Management
Advisory and Strategy - Michele Fong
Head, Wealth Advisory and Communications - Tan Jian Hui
Investment Strategist,
Investment Strategy and Communications - Low Xian Li
Investment Strategist,
Investment Strategy and Communications - Zack Tang
Investment Strategist,
Investment Strategy and Communications
UOB Personal Financial Services Investment Committee
- Singapore
- Abel Lim
- Ernest Low
- Michele Fong
- Tan Jian Hui
- Low Xian Li
- Zack Tang
- Jonathan Conley
- Alexandre Thoniel, CAIA
- Chen Xuan Wei, CFA
- Chia Hong Wei
- Daphne Chan
- Marcus Lee, CFTe, CMT
- Ivan Hu
- Chloe Kwan
-
Malaysia
- Ryan Tan
- Mow Wei Sern
- Thailand
- Suwiwan Hoysakul
- Boonnisaed Thanyaworaanan
- China
- Huang Li Li
- Indonesia
- Diendy
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