‘Outlook 2024: tech and mining to shine in H2’

In the first half? Klement says MedTech stocks, related to kidney disease, will offer investors healthy returns.

(AI Video Summary)

"Black swan" events to watch out for in 2024

In a recent video interview with IGTV, Joachim Klement from Liberum Capital talked about potential unexpected events, known as "black swans", that could impact the financial markets in 2024. He mentioned that one possible "black swan" could be the market getting overly optimistic and pricing in cuts to interest rates by the Federal Reserve (Fed) too early in the year. If the US economy remains strong with robust consumer spending and GDP growth, the Fed may delay cutting rates. On the other hand, if there's a sudden collapse in consumption and GDP growth in the first half of the year, the Fed may have more flexibility to cut rates earlier. If that were to happen, stock markets would benefit from the rate cuts.

Considering mining and tech investments

To manage the risk, Klement advises shifting investments towards defensive sectors like healthcare and consumer staples. This is until there's more clarity about the timing of the Fed's actions and the overall state of the US and global economy. Once the rate cuts are confirmed and economic growth picks up, Klement suggests considering investments in two types of sectors: mining and technology. For example, Anglo American, a mining company, recently received an upgrade due to the decline in metal prices. Clement predicts that other mining companies like BHP, Rio Tinto, and Antofagasta could also perform well in the future.

It's also important to consider the potential rebound in China's consumption. The Chinese government is taking a cautious approach to deflate the real estate bubble, which should result in a more sustainable recovery in demand from China, especially in the second half of 2024.

Medical tech companies

When it comes to medical technology companies, Klement mentioned Convatec in the UK, a company focused on wound care, as having attractive value. He also highlighted Fresenius Medical Care, which has been oversold and is projected to have better earnings than currently anticipated.

Regarding the tech sector, Klement believes it will be one of the first to bounce back in 2024, particularly in the second quarter. He suggests looking at tech companies that are tied to businesses' capital expenditure, especially those involved in cloud computing. Microsoft and Amazon were specifically mentioned as favorable investment options for 2024.

Overall, Klement's outlook for 2024 raises the possibility of unexpected events affecting the timing of Fed rate cuts and the performance of consumer spending and GDP growth. To manage the risk, defensive sectors like healthcare and consumer staples are recommended, while opportunities can be found in mining and technology sectors. Additionally, the potential rebound in China's consumption and specific medical technology and tech companies were highlighted as interesting investment possibilities.