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2023 was a year where geopolitics grabbed the headlines but had little impact on markets, which is consistent with historical precedent. The US flirted again with default and its credit rating was downgraded but markets continued along their way, while conflict in the Middle East barely caused a long-term ripple in the cost of crude oil. That means they will remain a source of volatility, if only in the very short term.
In the new year, the economic debate will likely move on to growth in place of defeating inflation which is what markets and central banks have been focused on for over a year. Elections across the globe will involve more than half the people on the planet, the first time this milestone has been crossed says the Economist. That’s close to 2 billion people in more than 70 countries. Undoubtedly, the US election will have the most impact on markets, with implications for Fed policy, global trade and US-Sino relations, plus ongoing dealings with Ukraine.
The latter will further strain fiscal settings in both the US and Europe at a time when fiscal and debt dynamics are increasingly restricted. Perhaps this will be more of a long-term issue for strategists and historians, who see the pre-existing trend of global fragmentation continuing at pace. The sphere of influence the US holds will be challenged as the world splits further, though markets will probably be most concerned about recession and the potential growth slowdown. However, that could mean even smaller geopolitical issues increase in importance if they have an effect on economic activity.
The information has been prepared as of 16th January 2024 and is subject to change thereafter. The information is provided for educational purposes only and doesn’t take into account your personal objectives, financial circumstances, or needs. It does not constitute investment advice. We encourage you to seek independent advice if necessary. The information has not been prepared in accordance with legal requirements designed to promote the independence of investment research. No representation or warranty is given as to the accuracy or completeness of any information contained within. This material may contain historical or past performance figures and should not be relied on. Furthermore estimates, forward-looking statements, and forecasts cannot be guaranteed. The information on this site and the products and services offered are not intended for distribution to any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
References
- “Emerging market catalysts – HSBC”. https://www.hsbc.com.my/wealth/insights/asset-class-views/investment-weekly/2023-12-11/ . Accessed 27 Dec 2023
- “2023 in review: Rates, rallies and reflections – JP Morgan”. https://www.jpmorgan.com/insights/outlook/market-outlook/2023-in-review-rates-rallies-and-reflections . Accessed 27 Dec 2023
- “What I learnt about the FTSE 100 in 2023 – The Motley Fool”. https://www.fool.co.uk/2023/11/15/what-i-learnt-about-the-ftse-100-in-2023/ . Accessed 27 Dec 2023
- “PwC’s Global Artificial Intelligence Study: Exploiting the AI Revolution – PwC”. https://www.pwc.com/gx/en/issues/data-and-analytics/publications/artificial-intelligence-study.html . Accessed 27 Dec 2023
- “Goldman Economists Cut Recession Chances To 15% – Investopedia”. https://www.investopedia.com/goldman-economists-cut-recession-chances-to-15-percent-7965659 . Accessed 27 Dec 2023
The information has been prepared as of the date published and is subject to change thereafter. The information is provided for educational purposes only and doesn't take into account your personal objectives, financial circumstances, or needs. It does not constitute investment advice. We encourage you to seek independent advice if necessary. The information has not been prepared in accordance with legal requirements designed to promote the independence of investment research. No representation or warranty is given as to the accuracy or completeness of any information contained within. This material may contain historical or past performance figures and should not be relied on. Furthermore estimates, forward-looking statements, and forecasts cannot be guaranteed. The information on this site and the products and services offered are not intended for distribution to any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
