In this 2024 Equity Market Outlook, John begins by reflecting on the market in 2023 in comparison to Ninepoint’s forecasts and predictions this time last year. The major trends offered by last year’s environment revolve primarily around the difficult inflationary and rate environment, lower bond values, lower PE multiples, and overall lower earnings across the equity market. John discusses some reasons why higher rates didn’t slow the economy in 2023, provides a look at the housing market in the face of the rate environment, and gives commentary on wage growth.
John then moves into Ninepoint’s forecasts for the upcoming year, some of which include:
- A forecast that the current strong economy will cool gradually over the course of 2024
- An expectation that inflation will remain sticky, above 2%
- A prediction that there will be fewer Fed cuts than expected, and later on in the year than suggested.
It’s notable that the Canadian market outlook appears to differ from the US for a number of reasons, such as:
- The Canadian housing market will feel the impact of higher rates sooner than the US due to shorter and variable mortgage terms, as well as our population boom in 2023
- Canada is already in a “per capita” recession, due to our population growing faster than our GDP
- There is a likelihood that the BoC will cut rates sooner and more intensely than the Fed in 2024
John goes on to provide a brief outlook on the Energy Sector in 2024 according to Eric Nuttall, Partner and Senior Portfolio Manager of the Ninepoint Energy Fund and Energy Income Fund.
To wrap up the outlook, John outlines the three main risks to the equity market in 2024, according to the Ninepoint Partners investment team: inflation surprisingly showing an upside, geopolitical conflict in Gaza, Ukraine, and Taiwan, and U.S. domestic political strife. Watch the full presentation below.
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