How will geopolitical factors play a part in the 2024 Global Market Outlook? 

2023 was a year where geopolitics grabbed the headlines but had little impact on markets, which is consistent with historical precedent. The US flirted again with default and its credit rating was downgraded but markets continued along their way, while conflict in the Middle East barely caused a long-term ripple in the cost of crude oil.  That means they will remain a source of volatility, if only in the very short term.  

In the new year, the economic debate will likely move on to growth in place of defeating inflation which is what markets and central banks have been focused on for over a year. Elections across the globe will involve more than half the people on the planet, the first time this milestone has been crossed says the Economist. That’s close to 2 billion people in more than 70 countries. Undoubtedly, the US election will have the most impact on markets, with implications for Fed policy, global trade and US-Sino relations, plus ongoing dealings with Ukraine.  

The latter will further strain fiscal settings in both the US and Europe at a time when fiscal and debt dynamics are increasingly restricted. Perhaps this will be more of a long-term issue for strategists and historians, who see the pre-existing trend of global fragmentation continuing at pace. The sphere of influence the US holds will be challenged as the world splits further, though markets will probably be most concerned about recession and the potential growth slowdown. However, that could mean even smaller geopolitical issues increase in importance if they have an effect on economic activity.   

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