In 2024, the global economy is gradually stabilizing, the strict policy of regulators is paying off, and inflation is slowing down, and GDP growth is accelerating. To make profitable decisions on the stock market, it is necessary to understand the situation in different countries.
Finam analysts conducted a study of the global economy and made recommendations. Finam.ru tells us what is happening with the economies of different regions and which companies' shares are promising for investors.
What is happening to the global economy in 2024?
The global economy is growing better than expected, experts are raising forecasts, but so far only slightly. The main problem preventing the economy from growing steadily is still international tension. In addition, inflation in the service sector remains stable due to wage growth against the background of low unemployment. As Finam analysts remind, already in June, the ECB began to reduce the key rate, and in August, the Bank of England is expected to lower the rate too. In September, the first easing of the US Federal Reserve's monetary policy is likely. The US presidential election is also in the spotlight. If Trump wins, taxes and government spending may decrease, and import duties may rise. If Biden wins, he will continue to implement his policies related to the climate agenda, increase social spending and taxes for wealthy citizens and corporations.
The US managed to avoid a recession
According to Bloomberg, the probability of a recession in the United States in 2024 is only 30%. This is the lowest level since the beginning of the Fed's rate hike in 2022. The labor market and inflation in the country are gradually stabilizing. According to the Fed, inflation is still high and may not reach the 2% target, which prevents the regulator from starting to reduce the key rate.
According to Finam analysts, this year the Fed may reduce the rate 1-2 times by 0.25-0.5%. By the end of the year, experts expect US GDP growth of 2.1-2.6% with a slowdown to 1.8-2% in 2025 and consumer inflation at 2.5-3%.
Finam analysts consider the shares of the American oilfield services sector to be the most promising. According to them, these companies continue to increase profits at double-digit rates due to higher oil prices and the transition to more difficult-to-recover reserves.
Schlumberger is the world's largest oilfield services company. Schlumberger's business is evenly distributed across all major oil producing regions in the world, and its activities cover all services necessary for oil exploration and production. According to experts, the company benefits from the distribution of business across different countries, the global trend towards underinvestment in oil and gas and the transition to more inaccessible reserves of "black gold". Schlumberger will continue to gradually reduce its debt burden and increase payments to shareholders.
Europe is emerging from stagnation
In Europe, the recession was mild, and now the region's economy is gradually recovering. Thus, unemployment in the eurozone has fallen to the lowest level in the history of 6.4%, inflation is slowing down, and wage growth is catching up with it. This improves consumer demand, as well as the mood of the population and business. In June, the ECB began reducing rates, but in the five months of 2024, inflation in the eurozone increased from 2.4% to 2.6%, so it is difficult to predict further steps by the European regulator. ECB representatives note that they do not have a pre-planned plan for rates.
Finam analysts forecast European economic growth of a modest 0.7-0.9% this year, accelerating to 1.3-1.5% in 2025. Inflation is expected to be around 2.5% by the end of the year.
The Chinese authorities support the market
The Chinese authorities are stimulating economic growth, and such a policy is already bearing fruit. In May, the IMF raised China's GDP growth forecast for this year from 4.6% to 5%. This corresponds to the official goal of the Government of the country. Chinese exports rose to 7.6% in May compared to the same period last year. In 5 months of 2024, it increased by 2.7%. By the end of last year, China became the largest exporter of cars in the world, surpassing Japan. Industrial production in China increased by 6.2% in 5 months, and industrial investment increased by 9.6% over the year. In addition, unemployment in the country decreased from 5.4% in January-May 2023 to 5.1% over the same period in 2024.
Experts note that China still has problems with the real estate sector: despite government support, it is still in crisis. In addition, the country is experiencing unstable domestic demand, weak lending and capital outflow from the country. Trump's return to the White House and pressure from the United States may complicate the situation.
Finam analysts expect the Chinese economy to grow by 4.7-5% in 2024, with a slowdown to 4-4.5% in 2025.
In China, experts named the most promising companies related to green energy and TMT, which are undervalued compared to their Western counterparts.
Xinyi Solar is one of the world's largest manufacturers of photovoltaic glass for solar panels. The company is also engaged in the sale and operation of solar power plants.
Finam analysts emphasize that Xinyi Solar is betting on the trend of increasing the input of solar generation in China, which, in their opinion, will continue to update records. At the same time, the company's shares are cheap after the recent decline, especially given the prospects for business growth.
Meituan is the largest Chinese company in the field of delivery of food and non-food products, ready meals and fresh products. In addition, Meituan owns an online platform for ordering everyday consumer services.
According to experts, the company's business is growing at a faster pace than other Chinese big tech companies. The closest competitors are delivery services from Alibaba and JD.com They won't be able to catch up with Meituan in a few years.
Meituan is also developing hotel, sightseeing and travel booking services that benefit from the recovery in demand in the Chinese economy.
