Ten EFG Bank convictions for the market in 2024

EFG Bank announced its top ten convictions for 2024. The Swiss bank believes that the global economy is on the right track towards a soft landing. “Our most likely scenario is a soft landing for the global economy in 2024. The global economy is likely to grow at about 2.5% to 3%, with emerging and developing economies growing faster than advanced economies.”

The bank is betting on productivity gains. “US productivity could benefit from a technology-driven productivity renaissance in 2024.”

Artificial intelligence can increase labor productivity, which, in the Bank’s opinion, together with demographic growth, will maintain GDP growth at about 2% per year in the USA.

The Finance Group also talks about “budget fragility.” Governments around the world are burdened by large budget deficits and high levels of debt. This is a problem that mainly affects the United States, where there is a structural imbalance between revenues and expenditures, which will continue until 2024.

Then he talks about political unrest. “More than half the world’s population lives in countries that will hold national elections in 2024. The US election – with the possibility of Donald Trump returning to the White House – will attract the most attention and will likely have the most profound consequences.

“Demographics is the future,” say economists at the financial group. It has often been said that demography determines destiny. “For any economy, the size of its population, its age distribution and the number of people in employment are factors that determine economic progress and deflationary forces,” the bank says.

Weight loss medications (such as Ozempic) and nutritional staples are strong trends for 2024. EFG Bank predicts that “the popularity of weight loss medications may increase in 2024.” “This market has huge potential, but its impact on the consumer goods sector is overstated,” the analysis says.

The transition to clean energy is an inevitable theme for 2024. “The transition from fossil fuels to clean energy remains of paramount importance, but progress is stagnant in 2023. We expect it to regain lost momentum in 2024,” says the Swiss bank.

A recovery in undervalued currencies is another prediction for the coming year.

“The long upward trend in US dollar appreciation in nominal and real exchange rate indices ended in late 2022. We expect undervalued currencies, namely the yen, to recover in 2024,” the financial group says.

Economists at EFG Bank see opportunities in bond investing. “We see interesting opportunities in the bond markets for 2024. Bonds with three- to five-year maturities in public and investment-grade corporate debt, inflation-linked bonds, and select convertible bonds,” they say.

Finally, they support granting privileges to small-cap stocks. “Historically, small-capitalization stocks tend to have higher returns,” and this trend, in the bank’s opinion, is likely to be confirmed in 2024.