Dear Reader,
Here are a few fearless predictions of what lies in store for the markets in 2024:
January: One of the most important geopolitical events of 2024 takes place in January---the elections in Taiwan. It will lead to a victory for pro-independence party DPP. Egged on by the US, Taiwan will then claim China.
Global movers and shakers congregate once again at Davos, earnestly engaged in ‘Rebuilding Trust’--the theme of the 2024 meet—over cocktails and hors d’oeuvres.
The South Summit of the Group of 77 will be held in Kampala, Uganda. Insiders say Uganda was chosen despite the leader of the Global South clearly being India, as delegates were wary of being forced to eat millets again.
Arab League wags finger at Israel for reducing Gaza to rubble.
The media will build its usual frenzy over the Indian Budget, interim though it may be. Stocks go up.
Inauguration of Ayodhya temple improves feel good factor to euphoric. Stocks go up.
February: On the second anniversary of the Ukraine war, US president Biden will say, “As we stand here on the second anniversary of the dastardly Russian invasion of Ukraine, the United States solemnly pledges to fight to the last Ukrainian.’’
Elections in Pakistan see a keen fight between political parties for the lion’s share of the generals’ votes.
The WTO's 13th Ministerial Conference takes place from 26 to 29 February 2024 in Abu Dhabi, United Arab Emirates. Ministers from across the world attend to sing funeral dirges while they solemnly bury the WTO
Stocks go up in anticipation of a favourable result for the Indian election.
March: People jumping out of windows in Moscow see an exponential jump before the elections in Russia.
Putin re-elected president with 93 percent votes, well ahead of Egyptian President Sisi’s 89.6 percent of the vote in December 2023.
Fed doesn’t cut rates. But markets reckon that’s because the US economy is still very strong. Stocks move up.
April: The IMF-World Bank spring meetings revise the growth estimates they had made about the world economy in January, re-revise their estimates for last October, and re-re-revise estimates made last April. This will lead to a rash of op-eds from economists and the business media.
A historic general election for India will be held in April/May. It is historic because it will decide whether the Indian market will get Amrit Kaal valuations.
Stocks go up in advance.
May: Amrit Kaal. Stocks go up.
Eurovision Song Contest in Sweden. Swedish GDP spikes on hopes of replicating the Taylor Swift effect, as the event boosts the economy.
Rishi Sunak calls UK election, pleading with voters to re-elect him as PM. ‘’My father-in-law would never forgive me if I don’t win,’’ he cries.
June: China cuts reserve requirement ratio for banks by 0.001 percent in latest attempt to stimulate economy, which fails miserably, leading to lower commodity prices and Indian stocks go up.
After Indo-US bonding in the Quad, they bond again, this time through the T20 World Cup in the US. Both governments hold talks on tricky matter of timings of matches played in the US but broadcast at prime time in India.
Indo-US bonhomie makes stocks in both markets go up.
July/August: Summer Olympics in Paris. French stocks rise in desperate hope that it will revive the sclerotic economy.
In India, as torrential rain leads to widespread floods, renewable energy stocks shoot up in hopes the government will finally have to do something about climate change. Ten EV IPOs hit the market.
RBI Bulletin says the central bankers are singing Raga Megha Malhar.
Media frenzy as India's regular budget presented. Stocks go up.
September: Rising global food prices lead consumers in developing countries to cut back on food, leading to drop in demand and lower food prices, in a fine example of economic principles in action. That clears the way for central banks to cut policy rates. Rate sensitive stocks go up.
A new AI breakthrough leads to coders, analysts, technical analysts, writers, losing their jobs, while robots replace factory workers rapidly. Stocks go up on the productivity gains.
October: On eve of G20 meet, Brazil claims leadership of the Global Southwest.
RBI pens paean to Indian economy in Bulletin. Writes, “And then the economy with GDP fills/And dances with the daffodils”.
Bank stocks go up.
November: The crucial US election will determine whether the world’s sole superpower and arbiter of global markets will be led by the befuddled or by the benighted.
Russian and Chinese stocks go up. An international conspiracy tries to force the Indian market down, but investors strike back by buying the dip.
December: With inflation having fallen and growth resilient, gloom and doom mongers now warn against neither a black swan nor a grey rhino, but a pink elephant.
Liquor stocks go up on demand for sighting pink elephants.
The above events indicate that 2024 is set to be a very interesting year. Our columnist Ananya Roy says it is the year when the expectations-driven rally must transform itself into a fundamentals-based one. Another columnist has a piece on investing like Napoleon in 2024. But this FT story (free to read for Moneycontrol Pro subscribers) points out that US stocks and bonds have no room for error. Simply put, Napoleon shouldn’t meet his Waterloo.
Clearly, a philosophical approach is needed in navigating 2024. I present, accordingly, Monty Python’s Philosophers Song, with the compliments of the season.
Wishing you a Happy and Profitable New Year,
Manas Chakravarty
Here are some of the other stories and insights we published this week, apart from our technical picks in the equity, commodity and forex markets:
Stocks
Two tales of the agrochemical market, Sagar Cement, Kaynes Technology, Cantabil Retail India, Ami Organics, Fiem, KIMS, Weekly Tactical Pick
Markets
SEBI’s shortening of the settlement cycle will take a toll on the market
Will lower incentives play spoilsport for Ola Electric’s IPO?
Equity ownership goes up to record levels in India
Expected decline in bond yields an opportunity for investors
Mutual Fund industry assets top Rs 50 trillion landmark
2023 a year to remember for SME IPOs
Financial Times
Big Tech outspends venture capital firms in AI investment frenzy
Foreign investors unwind $33 bn bet on China growth rebound
Inside Nio: Electric car group’s boss William Li and his fight for survival
Inside Edge
Silent wait for HDFC Bank re-rating, BSE craves for NSE public issue, Polycab promoters pitch tent
White & White’s cement stake, cashbacks in small caps, Mogul’s railway trip, IPO fine print
Companies and industries
NBFCs went higher, faster and stronger in loans but not safer
Will CESC’s pivot towards green energy resolve its valuation woes?
Startups and Tech
Will 2024 see more Dragons take wing?
Economy
Why never-better bank balance sheets aren’t enough for RBI
Room for limited monetary easing will open up in 2024
Resilient services buoy current account in September quarter
High food inflation can upset the applecart
RBI warns of growing bank-NBFC linkage
Needed an industrial policy that spurs manufacturing and jobs too
Personal Finance
This debt fund is a winner and not just when interest rates start to fall
Beating the market rollercoaster with longer term investments
Others
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