We evaluate our 2023 predictions and spice things up with a forecast for the financial landscape of 2024, sprinkled with some juicy insights into upcoming trends.
Let’s take a closer look at the pivotal events that shaped the financial landscape in 2023:
Rise of AI: In 2023, the integration of artificial intelligence (AI) into various sectors reached unprecedented levels. Advanced AI models like ChatGPT gained widespread attention, sparking discussions about the future of automation and its potential impact on the workforce. Companies across industries raced to incorporate AI technologies into their products and services, signalling a significant shift towards AI-driven innovation.
Banking Turmoil: The banking sector faced significant challenges in 2023, marked by notable failures and crises. Silicon Valley Bank, once considered a stalwart of the tech industry, encountered liquidity issues stemming from a surge in withdrawals and substantial losses on its bond portfolio. Similarly, Silvergate, a prominent player in the cryptocurrency space, announced its voluntary winding-up, sending shockwaves through the financial community. Additionally, Credit Suisse, a venerable Swiss banking institution with a rich history, grappled with a liquidity crisis, highlighting the fragility of even the most established financial institutions in times of economic uncertainty.
Concerts as Economic Boosters: Amidst the financial turbulence, the entertainment industry emerged as an unexpected source of economic resilience. Iconic performers like Beyoncé and Taylor Swift embarked on record-breaking concert tours, injecting billions of dollars into the US economy. Taylor Swift’s “Her Eras” tour shattered revenue records, surpassing the $1 billion mark, while Beyoncé’s tour generated an estimated $4.5 billion in economic activity, rivaling the economic impact of major global events such as the 2008 Olympics in Beijing. These unprecedented financial contributions underscored the significant role of popular culture in driving economic growth and stability.
Market Resilience and Surprises: Despite initial concerns and low market expectations, 2023 witnessed remarkable resilience and unexpected market performances. Technology stocks, buoyed by breakthroughs in artificial intelligence and strong corporate earnings, defied expectations and experienced significant gains. The fear of an impending recession gradually dissipated as the year progressed, paving the way for a notable market rally. Amidst the uncertainties and challenges, the financial markets showcased remarkable resilience and adaptability, demonstrating the inherent dynamism of the global economy.
In our previous episode, we made several predictions for the year 2023, aiming to forecast various aspects of the financial landscape. Let’s review how accurate our predictions turned out to be:
Share Market Projection: Our forecast anticipated a modest 10% surge in the share market, but reality surpassed expectations with the S&P 500 witnessing an impressive growth of around 26%. While our prediction hinted at a bullish sentiment, the magnitude of the actual market upswing caught us off guard.
Housing Market Outlook: We foresaw a downward trajectory in house prices coupled with a surge in transaction volumes. However, the actual market dynamics painted a different picture as house prices plummeted by 10%, contrary to our projections. Additionally, transaction volumes remained stagnant rather than experiencing the anticipated boost.
Interest Rates and Banking Competition: Envisioning heightened competition among banks, particularly in terms of interest rates, our forecast missed the mark as banks pivoted towards adjusting credit policies instead. Although there was a degree of competitive behaviour observed, it diverged from our expectation of interest rate-centric competition.
As we embark on a new year, it’s time to peer into the crystal ball and unveil our predictions for the financial landscape of 2024:
Trump’s Return: Anticipating a resurgence in support, we forecast Donald Trump’s return to the U.S. presidency, propelled by mounting momentum and discontent with current policies.
Inflation in New Zealand: With a keen eye on economic trends, we predict a decrease in inflation in New Zealand to 3%, aligning with government targets and broader economic indicators.
Rise of New Zealand Streaming Companies: In response to growing digital content consumption, we foresee the emergence of New Zealand-based streaming companies, catering to the increasing demand for homegrown entertainment options.
Stock Market Fluctuations: Building on infrastructure investments and economic recovery efforts, we project a 15% jump in both the New Zealand and ASX stock markets, reflecting renewed investor confidence and market buoyancy.
The Warehouse’s Market Disruption: Expanding its footprint beyond traditional retail, we anticipate The Warehouse disrupting New Zealand’s supermarket duopoly by venturing into the grocery market with independent stores, challenging the dominance of established players.
Musk Sells Twitter: Faced with mounting pressure from investors amidst Tesla’s underperformance, we predict Elon Musk’s divestment from Twitter, as he refocuses on bolstering the automotive sector.
As we conclude our predictions, 2024 presents both promise and uncertainty across political, economic, and market spheres. Our forecasts offer valuable insights for navigating the evolving landscape and seizing opportunities amidst potential shifts and transformations.
Political Dynamics: Keep a close watch on the political arena, particularly in the United States, as the potential return of Donald Trump could have far-reaching implications for both domestic and global affairs.
Economic Trends: Stay attuned to inflationary trends in New Zealand and their impact on monetary policy and consumer spending patterns, as policymakers strive to strike a balance between economic growth and stability.
Emerging Industries: Monitor the rise of New Zealand-based streaming companies and their efforts to carve out a niche in the digital entertainment landscape, presenting opportunities for local talent and content creators.
Market Opportunities: Position yourself to capitalise on potential stock market fluctuations, leveraging infrastructure investments and recovery initiatives to drive portfolio growth and diversification.
Retail Disruption: Prepare for potential disruptions in the retail sector, particularly with The Warehouse’s entry into the grocery market, which could reshape competition and consumer preferences in the supermarket industry.
Corporate Strategies: Stay informed about corporate decisions and strategic shifts, such as Elon Musk’s potential divestment from Twitter, as they reflect broader trends in business leadership and market dynamics.
The information in this article is general information only, is provided free of charge and does not constitute professional advice. We try to keep the information up to date. However, to the fullest extent permitted by law, we disclaim all warranties, express or implied, in relation to this article – including (without limitation) warranties as to accuracy, completeness and fitness for any particular purpose. Please seek independent advice before acting on any information in this article.