Johannesburg, 29 January 2024: The tech terrain experienced a riveting 2023, propelled by AI innovations and the essential hardware supporting them. However, with concerns looming from war, logistical challenges, high interest rates, and the persistent remnants of the Covid-19 pandemic, the question on traders’ minds is: What does 2024 hold?
Fred Razak, Chief Trading Strategist at CMTrading, unveils his perspectives on the upcoming market dynamics.
A Momentary Shift
2023 into 2024 is the difference of a second. The early stages of 2024 aren’t going to see that much of a difference from what we saw at the end of 2023. We will still have concerns about inflation and interest rates being so high for so long, and I think we will start to see some response to that,” says Razak.
Election Year Complexities: A Historical Stalwart
As 2024 unfurls, Razak raises the curtain on a significant subplot—an election year in the United States. “Historically, that has not been a positive environment for the stock market,” he notes, acknowledging the uncertainties that political transitions often inject. The market may experience a temporary dip, but Razak suggests optimism for a potential resurgence post-election, urging traders to factor this historical trend into their forward-looking strategies.
The Political Fable: USA Elections Unveiled
In the intricate tapestry of 2024, the USA elections emerge as the central plotline, dominating the narrative of stock markets. “The biggest factor affecting stocks this year will be the US election,“ Razak declares, highlighting the palpable instability it brings. The ageing question of President Biden’s potential re-election and the enigmatic return of Donald Trump, armed with a robust support base, promises a gripping storyline. Legal battles and intense mudslinging add layers of complexity, creating an intriguing atmosphere and, as Razak puts it, “definitely entertaining.”
Whispers from the Past: Lingering Pandemic Shadows
While the tech world hurtles into the future, whispers of the pandemic’s ghost linger. “We haven’t fully recovered to pre-Covid days,” says Razak, recognising the enduring impact of the pandemic. Yet, the market is now entangled in a web of variables beyond the virus, weaving a more intricate tale of economic dynamics and global shifts.
Interest Rates: A Symphony of Change
The narrative takes a turn toward the symphony of interest rates. “I don’t want to celebrate a decline in interest rates too early,“ Razak cautions, acknowledging the cautious dance with economic levers. The Federal Reserve, equipped with an arsenal of strategies beyond interest rates, is poised for action. Razak foresees a tapering off, predicting the Fed’s exploration of alternative tools to control the money supply.
Strategic Bets: The Allure of AI
Razak directs the spotlight towards strategic investments. “Safe bets are all in AI,” he asserts, unveiling the allure of Artificial Intelligence as the exciting frontier for the future. While industry giants may not offer optimal value, Razak invites traders to explore midrange companies investing in AI, anticipating a trove of innovations.
Personalising Portfolios: A Tailored Investment Approach
Razak leaves traders with a crucial directive: the absence of a one-size-fits-all share. “It comes down to your financial goals, your risk adversity, and your time frame,” he advises. He suggests a slightly more aggressive stance with midcap stocks for the daring youth, while the more seasoned investor may find solace in lower-risk options.
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The information provided in this article is for informational purposes. The content reflects the opinions and perspectives of the author as of the stated date and market conditions may change.
