Breakfast Bites - Wrapping up the eventful 2024!

Rise and shine everyone!

We’ve finally made it to the last of the year. And what a year it has been!

We’ve seen leadership changes across the globe, Central Banks adjusting to an easing cycle and markets that remain fairly resilient in the face of all these macro changes.

The last couple of days have certainly been a roller coaster ride, starting from the Fed meeting, and markets are now adjusting to the new normal of changes in fiscal policy and the corresponding monetary responses that may follow.

We saw a number of interesting developments in Asia this year… starting out with Japan hiking rates in March for the first time in 17 years, and then starting to pull back on bond purchases. The second hike was even more surprising because it was larger and set of a chain of events that sent the markets spiraling downwards, once some of the Yen carry trades were unwound.

China continues to struggle, in their own way. Markets hit lows, and Chinese Government Bond Yields closed at yet another low earlier today. While there were signs of optimism that the Government was finally going to start easing monetary policy, fiscal measures have fallen short and we’re left with a lack of clarity on direction. One thing’s almost certain, that 5% GDP growth target has now become elusive.

For what it’s worth, Malaysia is one of the more promising economies in Asia now, followed by India. I say this not because India has lost its luster as an place to invest, but rather because everyone has caught on to the India story. Furthermore, we’re seeing some slowdown there as the government shift policies somewhat and the Central Bank continues to hold interest rates in the face of inflation.

The EA and the UK have seen their fair share of turmoil this year… mostly on the political front. The bright spot is that they have seen inflation decelerate meaningfully and while that is accompanied by a slowdown in GDP growth, my personal opinion is that ECB has done a decent job in managing their easing process. The Bank of England now struggles with their decisions after new government budgets have discussed more fiscal spending.

But, we’ve seen remarkable progress this year nonetheless and of course, energy costs have been a big contributor to that.

Which brings us to the Middle East and OPEC. While many of the economies in the Middle East continue to flourish, attracting investments and an influx of people (causing our rents to skyrocket and insane amounts of traffic!), the price of oil has been a thorn in their sides. The OPEC+ have struggled to keep to countries in line with their respective quotas, and have not been able to rollback the production cuts because of the lack of demand, namely from China.

With the new US administration’s proposed policies on energy and tariffs, it remains to be seen how the OPEC+ now responds. Which is also an issue for Canada - where the central bank started easing quite aggressively to ameliorate falling GDP growth.

Mexico and Brazil were very interesting this year. With the changes in Government, we’ve seen turmoil hit the markets. Brazil not only ended their easing cycle but starting hiking again! Next year will be a challenging one for them, if there are tariffs imposed and if the fiscal situation doesn’t improve.

And last but not least… we have the US. The economy has been far more resilient than any of could have imagined. Coming into 2024, I did a regional TV appearance and discussed the possibility of a soft landing. To be honest, even I didn’t believe my own words completely but, that what I discussed because that’s what the data and the signs were telling us.

Amid a strong economy, the markets have remained resilient… led mostly by the Mag 7. That was actually boring for a minute. Post-election though, we’re starting to see signs of life in other companies. We’re expecting more of that to come and that we will find more opportunities for trading and investing, as the AI theme broadens and many of the old economy stocks come back into play.

2024 was definitely an eventful year… but I am excited about 2025. I think we’re going to see interesting developments unfold across the globe, some good, some bad…. but interesting nonetheless.

Before I sign off, let me take this opportunity to wish you and your loved ones a very happy new year. I am spending the new year with my extended family after almost 10 years, and it’s been such a wonderful trip!

I also want to take the time to thank you for staying with us. We are very grateful for all the support that you show us, as we navigate these markets, and we hope to bring you even more exciting developments in 2025.

Here’s a picture I took of the longest bridge in my country, Bangladesh. It accommodates both road and rail traffic. But, what’s special about this bridge is that this river is very deep and so it has the deepest pile depth in the world! We call it the “mighty” Padma river, because of the strong currents and it is known to be very unforgiving so building this bridge was quite a feat!

Happy New Year everyone! See you all in 2025…