“The topic of inflation recedes into the background. The prices of energy raw materials, which are returning to the levels before the beginning of the Russian invasion of Ukraine, have a positive effect. The decline in basic interest rates should have a positive impact on bond prices next year,” said Wood & Company analyst Vladimír Vávra.
“From a risk-reward perspective, I see bonds as the most attractive asset class,” he added.
According to him, the profits of American companies on average will grow in the order of higher percentages, and European companies in the order of lower percentages. Given the relatively high benchmark, the outperformance of equity indices is unlikely to repeat itself in 2024, yet equity performance could remain positive.
Money under the pillow and in the account. Czechs are conservative savers
For example, for the American S&P 500 index, Vávra expects an annual appreciation of between five and ten percent.
Shares of smaller companies still have some catching up to do, added Port analyst Lukáš Raška. However, according to him, smaller companies do better in an environment of lower interest rates, which is where the development is headed. “Better tomorrows may lie ahead even for developing markets that have underperformed this year,” he noted.
It can weaken the dollar
“In a rate-cutting environment, the US dollar may be under pressure and may weaken slightly. This should be an advantage for export-oriented companies,” stated Purple Trading analyst Petr Lajsek.
He pointed out that the past year was one of the best for American stocks, for example. According to him, such growth will most likely not be repeated.
Conflicts in Ukraine and the Middle East continue and the prices of energy commodities are particularly at risk, Lajsek believes. If tensions escalate further, oil and gas prices may shoot up, which would make it harder to fight inflation and increase the likelihood of a recession in the US and especially in Europe. If the dollar continues to weaken, gold may become more expensive, he added.
Tomáš Jícha from Atris pointed out that with the expected gradual reduction of the rates of the Czech National Bank, returns from term deposits will also decrease. According to him, real estate is also available for investment next year.
Shares on the Prague Stock Exchange did well this year, the PX index rose by 17.7 percent
2023-12-31 13:16:22
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