Peter E. Huber’s stock market outlook for 2024: These investments could be worthwhile in the new year

• Stock market outlook 2024
• Bonds or stocks?
• Gold price in view

Inflation and interest rates will still be in focus in 2024

What will the new stock market year 2024 bring? Nobody knows the exact answer to this question, but there are some experts who provide an outlook on what is happening on the world’s trading venues – including fund manager Peter E. Huber. The stock market expert, who was awarded the Sauren Award as fund personality of the year in 2018, expects that the topic of inflation and interest rates will continue to concern the markets in 2024. Not only did inflation weaken in 2023, with the latest interest rate decisions by the Fed and the ECB, the monetary authorities repeatedly did not touch the key interest rate. Investors are therefore expecting the first interest rate cuts next year.

Government debt could make bonds dangerous

These developments are causing a “jubilant boom” in the bond markets, as Huber explained in his “Huber’s Portfolio” newsletter. However, the expert warned against premature optimism. “We are following this development with extreme suspicion. On the one hand, this is due to an explosion in national debt,” said the fund manager. “In addition, there is an inverted yield curve (ECB interest rate at 4%, 10-year Bunds at 2.3%). We fear that even if the ECB cuts interest rates, yields at the long end will rise. This means nothing other than a normalization of the interest rate structure . In the worst case scenario, we even fear the start of a national debt crisis. We are therefore only invested in government bonds with a maximum remaining term of 12 months and thus avoid any risk of interest rate changes.”

Value stocks on the verge of a comeback?

As far as stocks are concerned, 2024 could be the time for value stocks, as the expert noted. “2023 was a year to forget for value investors! While highly valued stocks – especially from the technology sector (“The Magnificent Seven”) became increasingly expensive, low-valued companies stood still,” says Huber’s text article. “In the case of boring stocks that offer little growth prospects and are therefore valued at low prices, there are often positive surprises. It is therefore only a matter of time before value stocks bring joy again. Until then, you can treat yourself to high dividends .”

Difficult environment for DAX companies

Although the DAX has increased significantly over the last 20 years and was able to surpass the 17,000 point mark for the first time in December 2023, if you look at the prices alone without dividends, hardly anything has happened since then, says Huber. “During the same period, corporate profits and dividends continued to rise, so that German stocks are now 25% undervalued,” he pointed out. The situation is similar with the EURO STOXX 50.

So far, the car manufacturers BMW, Mercedes-Benz and Volkswagen, which are included in the DAX, have been able to contribute to a lion’s share of the company’s profits in the index, but Huber warned of a “turnaround” in this industry: “Demand is weakening, you have to grant discounts again, while at the same time Wage and material costs are rising. And when it comes to e-mobility, it’s difficult to keep up,” the market observer pointed out.

Asian stocks remain largely interesting

However, Huber is much more optimistic about Asian stocks – albeit with restrictions. “Low production costs, increasing prosperity and numerous new free trade agreements are strengthening intra-Asian trade,” praised the stock market expert. Huber has had Japanese stocks in particular on his buying list for a long time. But one or two emerging market values ​​are also interesting. However, caution is advised when it comes to Chinese stocks: “Due to numerous factors – mega-bankruptcies in the real estate market, repressive state, geopolitical conflict with the USA, weak economic growth – most experts consider Chinese stocks (including those listed in Hong Kong) to be uninvestable,” they say it in the annual outlook. However, Huber does not see the situation as dramatic. The challenges in the People’s Republic have been known for a long time and have therefore already been taken into account in the courses. However, the expert is currently not making a purchase recommendation.

Gold price at new high?

There is also no “buy” rating for shares in gold mining operators at the turn of the year. “Here, the historical highs are a long way off,” Huber pointed out. “They are unpopular and are rarely given a higher weighting in investors’ portfolios.” With reference to Mark Dittli, journalist for the “Neue Zürcher Zeitung” publication “The Market”, Huber even describes gold mining stocks as “the most unpopular investment in the world”.

However, the situation is different for a direct investment in the yellow precious metal. Not only did the gold price behave “constructively” in 2023, a new record high is also possible soon. The fund manager sees the status of gold as a currency substitute in countries such as Argentina, Venezuela and Turkey as a driving force. But the fact that gold is always on central banks’ shopping lists also benefits the raw material.

Editorial team finanzen.net

This text is for informational purposes only and does not constitute an investment recommendation. finanzen.net GmbH excludes any claims for recourse.

Selected lever products on BMW

With knock-outs, speculative investors can participate disproportionately in price movements. Simply select the lever you want and we will show you suitable open-end products on BMW

The leverage must be between 2 and 20

Advertising