2024 Global Market Outlook Tectonic shifts create new opportunities  

The economic distortions of the past few years have produced major changes to the global investment landscape. We are in a new regime of higher interest rates and stickier inflation. We believe investors will need to adapt to this new regime but could find opportunities by staying agile and taking a broad view. Read our 2024 Global Market Outlook for timely insights on navigating this transformed world. 

Three themes for a world transformed

Economics

Navigating macroeconomic fog

Global economies have stayed resilient amid uncertainty, but headwinds are likely to mount in 2024.

Fixed Income

Rethinking fixed income

We think the Fed is likely to remain on hold in 2024. High yield and shorter-term investment-grade corporate bonds could offer opportunities.

Equities

Broadening equity horizons

Equity investors may benefit from casting wider nets in 2024. We see opportunities in Japan, emerging markets, health care, and artificial intelligence (AI).

Key takeaways from our 2024 Global Market Outlook.

Summary with Global Investment Specialist Ritu Vohora, CFA®

The economic distortions stemming from the pandemic have produced tectonic shifts in the global investment landscape. Investors have had to navigate conflicting macroeconomic signals and a market narrative that has gyrated almost every few weeks. Many economies have been resilient in 2023, despite aggressive rate hikes and tightening liquidity. This has fueled hopes of a soft landing. However, as we head into 2024, uncertainties remain. Global growth is at risk, as the long and variable lags of monetary policy start to bite. And while inflation is rolling over, there’s a risk it will inflect higher. We remain neutral on stocks and bonds overall. Bond yields have been on a roller coaster ride in 2023. While central banks are likely at the end of their hiking cycles, the baton of volatility will be handed from the short end to the long end of the yield curve—given supply dynamics and an uncertain economic outlook. We think rate cuts will materialize later than markets expect, but the Fed will remain data dependent. A steepening of global yield curves is likely to be a more significant driver for markets than the outlook for short-term rates. Attractive yields provide the opportunity to lock in income in high-quality bonds. Shorter-term investment-grade bonds, high yield bonds, and emerging market debt also offer opportunities. The massive outperformance of the “Magnificent Seven” tech stocks has been a defining feature of equity markets in 2023. 2024 may invite broader equity opportunities and warrants a diversified approach. Delivery on earnings expectations will be key. Alongside generative AI, health care innovation and falling energy productivity are structural areas of opportunity. We also see select opportunities in Japan, emerging markets, and small-caps. Tectonic market shifts will create new opportunities to put cash to work in 2024. It will also demand a greater focus on fundamentals, diversification, and risk management. A fertile ground for active investors.

Tactical allocation views

Investment professionals from the T. Rowe Price Multi-Asset Division present their views on the relative attractiveness of asset classes and subclasses over next six to 18 months.

 

Download PDF

Watch the webinar

Our chief investment officers weigh in on the state of markets and the economy heading into 2024. Continuing education credits available for financial professionals. 

 

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T. Rowe Price cautions that economic estimates and forward-looking statements are subject to numerous assumptions, risks, and uncertainties, which change over time. Actual outcomes could differ materially from those anticipated in estimates and forward-looking statements, and future results could differ materially from any historical performance. The information presented herein is shown for illustrative, informational purposes only. Forecasts are based on subjective estimates about market environments that may never occur. Any historical data used as a basis for this analysis are based on information gathered by T. Rowe Price and from third-party sources and have not been independently verified. Forward-looking statements speak only as of the date they are made, and T. Rowe Price assumes no duty to and does not undertake to update forward-looking statements.

Investment Risks

Fixed-income securities are subject to credit risk, liquidity risk, call risk, and interest-rate risk. As interest rates rise, bond prices generally fall. Investments in high-yield bonds involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities. Because of the nature of private credit there may be heightened risks for investors, such as liquidity risk and credit risk to the underlying borrower and investments involve greater risk of price volatility, illiquidity, and default than higher-rated debt securities. International investments can be riskier than U.S. investments due to the adverse effects of currency exchange rates, differences in market structure and liquidity, as well as specific country, regional, and economic developments. These risks are generally greater for investments in emerging markets. Small-cap stocks have generally been more volatile in price than large-cap stocks. Mid-caps generally have been more volatile than stocks of large, well-established companies. Investing in technology stocks entails specific risks, including the potential for wide variations in performance and usually wide price swings, up and down. Technology companies can be affected by, among other things, intense competition, government regulation, earnings disappointments, dependency on patent protection and rapid obsolescence of products and services due to technological innovations or changing consumer preferences. Health sciences firms are often dependent on government funding and regulation and are vulnerable to product liability lawsuits and competition from low‑cost generic product. Commodities are subject to increased risks such as higher price volatility, geopolitical and other risks. There is no assurance that any investment objective will be achieved. Alternative investments typically involve a high degree of risk, may be illiquid, may undertake more use of leverage and derivatives, and are not suitable for all investors. Diversification cannot assure a profit or protect against loss in a declining market.

Additional Disclosure

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

Important Information

This material is provided for informational purposes only and is not intended to be investment advice or a recommendation to take any particular investment action.

The views contained herein are those of the authors as of December 2023 and are subject to change without notice; these views may differ from those of other T. Rowe Price associates.

This information is not intended to reflect a current or past recommendation concerning investments, investment strategies, or account types, advice of any kind, or a solicitation of an offer to buy or sell any securities or investment services. The opinions and commentary provided do not take into account the investment objectives or financial situation of any particular investor or class of investor. Please consider your own circumstances before making an investment decision.

Information contained herein is based upon sources we consider to be reliable; we do not, however, guarantee its accuracy.

Past performance is not a reliable indicator of future performance. All investments are subject to market risk, including the possible loss of principal. All charts and tables are shown for illustrative purposes only.

T. Rowe Price Investment Services, Inc., broker/dealer and T. Rowe Price Associates, Inc., investment adviser. 

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