As we step into 2024, the landscape of the global economy shows signs of a gentle landing, characterized by slower yet steady growth rates and decreasing inflation rates in several regionsIt is projected that the global economy will hit around 3.2% growth, while inflation is on a downward trend, albeit with significant inertia remaining in certain markets, particularly the United States, where the inflation rate has stabilized around 2.7%. A noteworthy feature of this transitional period is the decision by 26 central banks worldwide, including those in the United States and Europe, to implement interest rate cutsThe Federal Reserve's move in September marked its first rate decrease in four years, having lowered rates three times throughout the year, culminating in a total reduction of a significant 100 basis pointsMarket analysts foresee additional cuts by the Fed, potentially dropping another 50 basis points by 2025, aligning with expectations for broader monetary easing globally in the year to come.

The fluctuations in the forex market are also notable in this new economic paradigm

The dollar has gained strength, while positions in yen carry trades have begun to reverseThe Fed's recent actions could provoke asset outflows, leading to what experts term 'imported inflation' in other significant economiesWhile both the Eurozone and Canada initiated rate cuts as early as June, the magnitude of these reductions has widened the divergence from U.Srates, emphasizing their weaker economic fundamentalsAs a result, despite their earlier cuts, the dollar continued to riseJust a couple of months into this new phase, the dollar index surged by 4.5%. Initial projections suggest that while the dollar may strengthen in early 2024, later in the year, external factors like export dynamics could lead to a reversal, with the index forecasted to fluctuate between 103 and 110.

Looking into 2024, it’s anticipated that inflation in the United States will continue its gradual retreat, potentially nearing the Fed's established target of 2%. However, newly enacted monetary policies might exert upward pressure on inflation rates

• ISM: US Factory Activity Shrinks Again in December
• Tesla's Annual Sales Experience First Decline
• Microsoft to Invest $80 Billion in AI
• BYD: The Arrival of Market Value Management
• The Effects of Rising US Productivity

The Federal Reserve is expected to adopt a relatively accommodative stance, with only one or two additional rate cuts likely throughout the yearThe dollar index is predicted to maintain resilience or even strengthen slightly; however, potential uncertainties in the global economy and any resurgence of trade tensions could pose threats to the dollar's stability.

In the world of equities, 2024 is shaping up to be a year of substantial growth in the stock marketsAfter a tumultuous start marked by unexpected rate hikes from the Bank of Japan and a surge in unemployment in the United States—which culminated in a 'Black Monday' in early August—the global stock markets faced volatility but ultimately trended positively throughout the yearThe U.Sstock market has thrived amidst a wave of enthusiasm around artificial intelligence (AI) and the Fed's dovish turn, reaching record highs consistently

Notably, the S&P 500 index achieved a staggering 57 record highs during the year, surging over 25%, while the NASDAQ followed suit with 38 record peaks and a remarkable rise of over 31%. Even the Dow Jones Industrial Average saw substantial gains, with 47 record highs and an increase of more than 14%.

This year, diverse asset classes showcased a stark contrast in performance, with digital currencies making a striking entry; for instance, Bitcoin skyrocketed by 135%, while the NASDAQ index reported an impressive growth of 31.38%. The surge in these assets can largely be attributed to an influx of liquidity resulting from the global shift towards lower interest ratesThe vigor of the U.Sstock market can be further explained by the country's GDP nearing a remarkable 3% growth, combined with inflation dropping below 3%. The influential role of technology, especially the rapid advancement of AI, has been pivotal in augmenting this growth as major players in the sector collectively push the boundaries of AI development.

Amidst a high-interest environment, the U.S

equities are showing resilience, fueled by an influx of capital in the technology sector, particularly the stocks associated with AI, which have become central drivers of this market surgeNew technological ventures that stretch into arenas like cryptocurrency and space exploration continue to propel stock prices to new heightsNonetheless, in this climate of inflated valuations, investors are reminded to maintain vigilance regarding risk management.

The remarkable trajectory of U.Sstocks, especially within the tech sector, has drawn notable attentionLeveraging the rise of major technology stocks and the excitement surrounding AI investments, 2024 has seen the three main indices of the U.Sequities market ascend significantlyWeighing heavily, the top seven technology stocks have seen their weight in the S&P 500 index increase from around a quarter at the end of 2023 to approximately one-third currently

By last Friday, stock prices for key players like NVIDIA and Tesla experienced exceptional growths of 176.7% and 73.7%, respectivelyCompanies that have distinguished themselves through AI applications, such as AppLovin—which has astonishingly grown by 741%—and Palantir, which enjoyed a 360% rise, are capturing investor attention.

The sectors of technology and healthcare have emerged as the two standout domains within the U.Sstock market this yearThe energy behind tech investments has primarily been propelled by high-performance chips produced by NVIDIA, which are pivotal to the AI revolutionThis interest has seamlessly transitioned to peripheral components supporting AI applications, defining a 425% surge in Supermicro’s stock pricesMoreover, the overarching discussion has evolved to encompass energies—crucial to the advancement of AI technologies—leading to significant gains for stocks like OKLO, which saw a rise of 186% this year

As we approach the next year, AI is expected to leap forward in two critical areas: efficacy in application scenarios such as general AI and robotics, and breakthroughs across various scientific domainsConcurrently, the healthcare sector's rise is largely attributed to significant developments in weight-loss medications and other complex disease management, coupled with the integrations of AI technologies that are set to intensify competition.

In contrast, commodity markets in 2024 are revealing a tale of divergence concerning price trendsPrecious metals like gold and silver have soared, with gold prices leapfrogging from $2,060 per ounce at the start of the year to nearly an all-time high of $2,801 per ounce by the end of OctoberThe COMEX gold futures gained about 27% year-to-date, with a notable 13% increase just within the third quarterThis surge is predominantly driven by geopolitical risks and inflation concerns prompting investors to flock to the safety of gold

Copper prices have maintained elevated levels, albeit with noticeable volatility, reaching a historic peak of over $11,000 per ton in May before moderating in the latter half of the yearCrude oil prices have showcased a tendency to spike and then retreat.

The 27.26% rise in gold this year highlights an increased flight to safety among investors amidst intensifying geopolitical tensions and market uncertaintiesCoupled with the commencement of the U.Sinterest rate cuts, which diminish the carrying costs of non-yielding gold, along with various countries’ central banks moving towards de-dollarization through gold purchases, the demand from India for gold has further bolstered pricesCurrently, gold remains on an upward trend, with investment banks predicting a future price target of $3,000 to $3,200 per ounceOn the other hand, despite the bullish sentiments from entities like Goldman Sachs and influential contributors like Jensen Huang, the copper pricing trend has seen a decline due to inventory influences and slower-than-expected growth in data center developments raising concerns about an 'AI bubble.'