The financial world at a crossroads: What does the second half of 2024 hold?

The financial world has surprised everyone at the beginning of the second semester of the year with a state of permanent happiness on Wall Street, where stocks have risen an impressive 150% since the start of the pandemic, and it doesn't seem to have reached its peak yet. Stock markets, especially in the United States, are at historic highs, defying geopolitical tensions, rising interest rates, inflationary pressure, and moderate global economic growth. Will stocks continue to rise in the second half of 2024? The experts consulted do not dare to make definitive predictions, as everything will depend on companies' ability to maintain their profits. In the economic sphere, investment strategies for the second semester will be influenced by the evolution of inflation in major economies and central banks' decisions on the price of money. Although a rapid decrease in interest rates was expected both in the United States and in Europe, only a slight cut has occurred in the eurozone, while the US Federal Reserve remains at 5.5%, pending the evolution of prices and the strength of its economy. Despite expectations of a revaluation in the price of long-term bonds earlier this year, this trend has not materialized, and bonds from developed countries now have higher rates than at the beginning of the year. Political uncertainty in Europe, especially following the European elections and the upcoming election in France, has added a new element of risk to financial markets. The strength of stock markets has been one of the major surprises of the first semester of the year, with significant increases in both Europe and the United States, driven in the latter case by the technology sector and artificial intelligence. However, the challenges and threats of the upcoming semester include the presidential elections in the United States and the complex geopolitical situation, marked by conflicts such as the war between Israel and Hamas and the Russian invasion of Ukraine. Experts continue to favor equities, especially in the United States and Europe, although some prefer the eurozone for its more attractive valuations. Optimism about stocks is based on the forecast of an increase in corporate profits for the remainder of the year, with a moderately slowing US economy and incipient growth in Europe. Regarding long-term bonds, forecasts remain uncertain, as expectations of a decline in yields have not been met, and government bond prices have experienced losses. Conservative investors are faced with a dilemma due to the possibility of minor and slower cuts in interest rates by major central banks, which could affect returns. In the foreign exchange market, the decline of the euro against the dollar and the possibility of a return to parity between both currencies have caught the attention of analysts, who see a clearer outlook after the European elections. As for gold, a possible revaluation up to $3,000 an ounce is expected, driven by financial interest in the yellow metal amid a possible rate cut in the US. Regarding the price of oil, its evolution will be key in the coming months, with opposing forces that will affect its price, from OPEC cuts and global economic dynamism to lower demand due to a possible economic slowdown. Despite this volatile scenario, experts continue to seek investment opportunities in different assets, keeping an eye on market volatility and geopolitical events that could influence financial decisions throughout the second semester of the year.