- New Year, New Economy
- What Will Shape U.S. Economy in 2024
- Mergers and Acquisitions
- Financial Expectations for 2024
- Financial Goals for the Next Year
New Year, New Economy
Major financial and geopolitical risks loom over the global economies, but there is little consensus about the outlook for 2024.
Nowhere is this clearer than among the business leaders and portfolio managers at institutions surveyed by global CEO advisory firm Teneo. They manage a combined $3.4 trillion worth of portfolios and companies.
While investors are almost unanimous in their upbeat view of the economic climate, with 94% expecting improvement in the first half of 2024, more than half (53%) of CEOs are bracing for things to get worse.
Geopolitics is utmost in the minds of both groups surveyed, who are weighing the strategic importance of China. The CEOs are making game plans and contingency strategies for the outcome of the U.S. election.
Despite some key differences, investors and business leaders find some common ground on AI. Both groups (80% of all respondents) consider investing in the new tech a priority. However, investors think CEOs may be underestimating the extent to which AI will disrupt the workforce.
What Will Shape U.S. Economy in 2024
In terms of economic growth: if current trends continue, the U.S. economy is expected to experience moderate growth in 2024. Factors such as consumer spending, business investment, and government policies project a slightly more positive near future for the U.S.
Looking at employment, the labor market is expected to continue improving, with unemployment rates predicted to decline. However, the nature of employment (e.g., remote work, automation) and the quality of jobs created will factor in.
As for inflation, its rates may remain a concern, with potential impacts on consumer purchasing power and business operations. The Federal Reserve’s monetary policy decisions will be crucial in managing inflationary pressures.
Global Trade: trade dynamics, including international relations and trade agreements, will influence the US economy’s performance. Shifts in global supply chains and geopolitical developments could impact trade patterns and economic outcomes.
Talking about fiscal policy, government spending, taxation policies, and infrastructure investments will shape the economic landscape. The outcome of fiscal policy decisions and their impact on public debt levels will be important considerations.
As for technological innovations, advancements in technology and digital transformation could drive productivity gains and industry disruptions, impacting various sectors of the economy.
It’s important to recognize that unforeseen events, such as natural disasters, geopolitical conflicts, or public health crises, could significantly alter the economic outlook for 2024. Therefore, while these factors provide a general sense of the potential economic landscape, they are subject to change based on future developments.
Mergers and Acquisitions
Mergers and acquisitions are another area of broad agreement with 68% of both CEOs and investors expect a sizable M&A uptick in 2024 – following one of the worst years in 2023 – despite tougher regulatory oversight and higher cost of capital.
According to Paul Keary, CEO of Teneo, CEOs and institutional investors continue to navigate an incredibly volatile and fast-changing operating environment around the world. Every business leader has reason for concern about the year ahead, yet there is a clear desire to stop simply reacting and to start seizing opportunities, as evidenced by strong predictions for a recovery in M&A in 2024.
Financial Expectations for 2024
A quarter of those surveyed by Bankrate think worse is to come.
A wave of optimism as a new year approaches is inevitable, but for 2024 it may not include personal finances.
Two thirds of respondents to the survey from Bankrate.com said they do not expect their own financial situation to improve next year with one quarter believing it will be worse than in 2023, including 9% who are expecting a significant decline.
Inflation remains the number one factor in this pessimistic outlook with 61% of those who do not expect improvement in their finances citing this as a barrier. Other issues cited include stagnant/reduced income, interest rates, debt, return on investments or savings, and bad spending habits.
However, 37% of poll participants think their finances will be better next year including 12% who think this improvement will be significant.
The main factor here is higher income (42%), with better spending habits, reduced debt, returns from savings or investments, and lower inflation.
Across generations, boomers are most pessimistic about their finances in 2024, while Gen X are split, and millennials and Gen Z are more upbeat.
Financial Goals for the Next Year
The survey also asked about financial goals for the incoming year with paying down debt ranking top (22%).
Increasing income (perhaps with a higher paid job or second job), saving for emergencies, budgeting, investing more, and saving for retirement were all common goals mentioned.
According to Bankrate chief financial analyst Greg McBride, CFA, paying down debt has been the most commonly cited financial goal in each of the past 3 years, but that goal does take on added urgency with rates on credit cards and home equity lines of credit at record highs, mortgage rates at more than two decade highs, and auto loan rates at the highest in more than 15 years.
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