Projections for 2023 and 2024's ending

The experts make their short-term projections during this stormy period. The end of 2023 and the financial markets' projections for 2024 are discussed by César González, the financial director of Avanza Previsión, an insurance firm that is a part of the Mutualidad Group.

This analyst says that "worse times are to come" and that "the continuous rises in interest rates during 2023 have caused a high level of instability in the markets".

According to Gónzalez, there are two primary causes of this deterioration: "inflation that does not end up falling to the desired level, with Underlying CPI above the general rate, which leads to high-interest rates for longer and their contagion effect throughout the economy" is one of the key causes.

Therefore, the analyst predicts that "we will see a correction in the balance sheets of companies, a moderate recession and an agitated geopolitical situation, not only because of the war in Russia and Ukraine but also because of the recent conflict in the Middle East" , he states.

Concerning interest rates, Gónzalez predicts that "in the second half of next year, 2024, rates will start to show a gentle decline." One of the key concerns for the upcoming year, according to the expert, is that "interest rates remain elevated for longer, there is a greater risk of obvious instability for the markets."

Regarding fixed income, he states that "it is a great time to invest in fixed income, as these yield levels are a great opportunity to build a long-term portfolio". However, he cautions that "we have to be very careful with issuers that may have problems refinancing their debts, as the levels are going to be much more demanding than they were previously at low rates".

From a standpoint of equity, the analyst observes that "the possibility of more pessimistic scenarios is increasing, given the increased uncertainty in the markets due to the possible recession in Europe, as well as whether the strength of the US economy will be able to hold up"

(Sources: investing.com, reuters.com)