March 2024 saw the world’s economy ebb and flow as political moves and natural events impacted market sentiment. Different parts of the world each face unique trends and challenges, resulting in a clear view of the interconnectedness of the various economies across the globe.
Global trends in commodities and cryptocurrency
- Gold prices soared to new record highs
- Investments in Bitcoin Exchange-Traded Funds (ETFs) increased, highlighting the trend that investors are interested in both traditional gold and new digital currencies.
EMERGING MARKETS
South Africa
The country saw its highest inflation print in eight months at 5%. An unexcepted, but much welcomed increase in exports led to a R14 billion surplus and a 1.2% economic growth. Gold and platinum-related stocks fared well this month whereas others were not so lucky.
South African equities saw a 3.2% increase, with stocks like Harmony Gold, Gold Fields, and Impala Platinum showing significant gains, while companies like Absa, Discovery, and Remgro faced declines.
China
China aimed for 5% growth in 2024, with the government acknowledging the need for policy support amid a property market slump and deflationary pressures. Despite these challenges, the country reported strong manufacturing output and capital investment. Consumer spending remains tepid.
Improved global trade has been noted, with Taiwan’s trade figures indicating enhanced conditions. China’s economy, particularly in the property sector, continues to be a major influence on regional and global economic outlooks.
India
India has set its sights on becoming a leading manufacturing hub in Asia, surpassing Vietnam. It plans to do this by reducing high import taxes and fixing supply chain problems. Its growing ties with the U.S. could help it become more dominant in manufacturing, challenging China.
DEVELOPED MARKETS
United States
Unemployment in the US rose to 3.9% accompanied by slow-to-none wage growth, which could indicate signs of a slowing economy. In addition, US citizens are finding it harder to settle non-mortgage debts. However, the Federal Reserve has sighted potential interest rate cuts, which might relieve consumer pressure and influence future market dynamics.
Europe
Inflation in the Eurozone fell to 2.4%, leading to predictions that the European Central Bank (ECB) might reduce interest rates by the middle of the year. Even though service prices stayed high, the overall drop in inflation suggests that less strict monetary policies might be on the horizon.
The current economic environment highlights the importance of keeping a close eye on economic changes across the globe. Strategically allocating to regions, sectors and areas of the market that show potential remains a key focus in balancing risk and reward for investors.
