Financial expert warns: Less room for improvement on the stock market in 2024 - review of capital markets and outlook on key sectors.

Financial expert warns: Less room for improvement on the stock market in 2024 - review of capital markets and outlook on key sectors.

According to a report by www.t-online.de, less room for improvement is expected on the stock market in 2024. Carsten Mumm from the private bank Donner & Reuschel commented on the capital markets in 2024 and emphasized the importance of interest rates as well as the key sectors and regions this year. Geopolitical escalations in particular, such as in the Russia-Ukraine war or in the Middle East, were cited as the most serious risks for the capital markets.

A target of around 17,300 points was forecast for the German leading index Dax by the end of the year, which would only mean a moderate increase of a good two percent. The economic development is putting pressure on profit margins for many companies, while interest rates play a significant role and remain important. The world's most important central banks had raised their key interest rates significantly since 2022 in the fight against inflation, but it is now expected that interest rates could fall again this year. This would make stocks more attractive again compared to bonds and make refinancing companies cheaper.

Carsten Mumm forecast weak global economic growth of less than 3 percent for the current year, with the Asia region expected to experience above-average growth and play an important role. Despite possible positive surprises in China, structural growth weaknesses are expected there. Mumm sees the key industry for 2024 in the area of ​​technology and artificial intelligence (AI), which will play a central role in practically all sectors of the economy.

Mumm cited further geopolitical escalations as the greatest risk for the capital markets, especially in the Russia-Ukraine war and in the Middle East. These could lead to disruptions and destabilize the markets. In addition, attacks in the Red Sea by the Yemeni Houthis, who are allied with Iran, could cause oil prices to rise and thus counteract falling inflation. The expert also warned about the impact of the election campaign in the United States on the markets.

Overall, the forecast for the stock markets in 2024 remains cautious, with geopolitical developments as well as the development of interest rates and the global economy playing a decisive role.