As the global economy enters the second half of 2024, investors face a landscape filled with uncertainty and volatility.
According to analysts from consultancy Macquarie, several major risks could disrupt markets and change investment strategies in the coming months.
The most important factors include the upcoming US elections, China’s economic performance, and the valuation of growth and technology stocks. These risks are expected to significantly impact the market’s trajectory and influence investors’ decision-making as they navigate the rest of the year.
US Elections and Market Volatility
According to Macquarie, the US election is the most significant risk factor. With the global economy so closely tied to US stability, any political instability could have a broad impact on markets, Investing quoted the company as saying.
The consulting firm says that any inconclusive or disputed election result could lead to prolonged uncertainty and market volatility.
Furthermore, a political sweep where either party controls Congress and the presidency could cause market turmoil, especially if the outcome is seen as a dramatic policy shift.
Chinese economic performance
The performance of China’s economy, the world’s second-largest, is another crucial factor, according to Macquarie analysts quoted by Investing. While current forecasts point to a slowing economy but not a deep one, the potential for sudden political shifts remains a concern.
Any deterioration in the Chinese economy could have a significant impact on global supply chains and commodity prices. The actions taken by Chinese policymakers will be key to addressing these challenges.
Growth and Technology Stock Ratings
Technology and growth stocks, which have seen significant investment driven by innovations such as artificial intelligence, are the third major risk analysts estimate.
Although current earnings growth rates remain strong, with EPS growing 17% in Q2 2024, any unexpected slowdown could lead to a broad sell-off in these sectors.
Analysts warn that any decline in investment in AI could increase market volatility.
These risks, according to analysts, will be necessary to monitor because they may significantly affect global markets in the coming months.
