Renowned economist Ludovic Subran, the leading economist at Allianz, anticipates that the upward trend of stocks seen in late 2023 and earlier 2024 could likely last through this year despite potential market modulations. He acknowledges potential risks including geopolitical uncertainties and inconsistency in international trade relations, advocating for diversified and mindful investment practices.
Subran underlines that if the central banks postpone their interest rate reductions, the stock markets will keep advancing according to recent developments. His concern lies with the central bank potentially reducing interest rates earlier, causing a shift of focus from high-growth stocks to safer investments, possibly slowing down market growth.
Subran remains optimistic about the returns from late 2023 and early 2024, holding a firm belief in strong investment outcomes despite potential market fluctuations. The current positivity of markets, such as European stocks rising to a 12.7% yearly increase, the US market surpassing the 5000 mark, and increased growth in Asian markets, echoes Subran’s sentiment.
Amid such market developments, Subran states, “We predict a very cyclical pattern, possibly including a market adjustment. Investors are preparing for a substantial re-assessment, considering the shift might occur later and less than initially expected.” He urges investors to adapt to potential changes, warning of significant impacts on market performance.
Subran identifies the impact of the pandemic, geopolitical tensions, and a heightened awareness of environmental, social, and governance factors as contributing to current market volatility. Despite these risks, he believes these market dynamics can generate opportunities for shrewd investors.
Subran advises a cautious yet adaptable investment methodology, highlighting the central bank’s role in monitoring rate reductions. He emphasizes the significance of maintaining investment diversification, risk awareness, and strategic planning in the highly fluid financial environment.
