IG analysts discuss 2024 trading opportunities

There’s been a rise in gold to a new record high, driven in part by a relatively dovish Fed, pushing US 10yr yields down to levels not seen since the summer, but there’s also a rise in the recession risk unless central banks act outside their remit and start cutting rates to avoid a GDP contraction. IGTV caught up with IG’s Chris Beauchamp, Axel Rudolph, Nick Cawley and Richard Snow. After a look back at the year in the rear view mirror the discussion turned to what we should expect to be the main areas of interest in 2024. The discussion included an initial rise in stocks followed by a period of consolidation, the chances of a weaker USD continuing to drive gains in gold, the potential for gains in the crypto space, and how to trade the opportunity without any digital currency exposure.

(AI Video Transcript)

Global stock indices

The year 2023 was full of surprises in the trading world. Global stock indices like the Dow and the DAX reached record highs, thanks to big gains from companies like Nvidia, Microsoft and Apple. However, the dollar didn't perform as well and 10-year Treasury yields hit levels we haven't seen since June. People were expecting the Fed to cut interest rates, but the big question was whether or not we could avoid a recession. It was a rollercoaster ride of a year that caught many off guard.

The NASDAQ, S&P 500, and the DAX

Looking ahead to 2024, we're hopeful for a brighter outlook, but we should proceed with caution. There's a chance things could get volatile due to events like geopolitical conflicts and surges in inflation. In 2023, there were some successful trades in equity markets like the NASDAQ, S&P 500, and the DAX. Orange futures and sugar also performed well, although there were some unexpected ups and downs.

The foreign exchange market had a battle between what people expected and what the Fed was saying about interest rates. Going into 2024, it's predicted that the dollar will continue to weaken, which will be a relief for many markets. People are also keeping an eye on the dollar yen pair, as there could be a change in policy from the Bank of Japan that could cause a downward move in the pair.

The FTSE 100

The FTSE 100 hasn't been doing so great because major tech stocks are missing. Institutional flow has been weak and uncertainties about the UK economy and politics have scared some investors away. Cryptocurrencies and gold have shown potential for gains, but they've also been quite volatile. It all depends on things like ETF approvals and how the economy is doing.

The oil markets

The oil market has been worried about a possible recession and slow demand growth, but stability is expected in 2024 with potential supply cuts and changes. The Chinese economy was a letdown in 2023, with reopening efforts failing and concerns about deflation. We're not sure when things will turn around or if the Chinese government will provide stimulus.

Chinese markets

Chinese markets like the Hang Seng may see more declines and volatility in the coming months. Overall, it's important to be cautious and aware of the potential risks when looking at market performance and predictions for 2024.