In the first quarter of 2024 wrote a chapter in market history. Relentless AI (Artificial Intelligence) hype propelled tech-heavy indices to dizzying new heights, with giants like Nvidia, Alphabet, and Microsoft riding the wave of investor euphoria.
Furthermore, risk assets gained momentum due to anticipations around the Federal Reserve’s monetary policy outlook. Following one of the most aggressive tightening cycles in decades between 2022 and 2023, policymakers signaled that they were “not far” from acquiring enough confidence on the inflation outlook to begin cutting borrowing costs, despite the Fed sticking to its position during the first quarter.
In this context, the S&P 500 reached all-time highs above the 5,000 points mark after rising more than 10%. Gold encountered challenges early in the year, embarking on a strong bullish reversal beginning in mid-February, while the US Dollar exhibited notable strength across its top peers.
With such tremendous changes experienced in the world of online trading in UAE, let us look at what we might expect in the second quarter of 2024.
Gold market: in neutral waters
Gold was the best-performing precious metal in 2023, with a 13.45% gain and this out-performance continued in Q1 2024, as the precious metal reached all-time highs at $2,300.
The second quarter may see a period of consolidation for gold, following its impressive gains in the year’s first months. With that in mind, a dramatic price surge in either direction is unlikely barring an unexpected shift in global inflation dynamics and the monetary policy outlook.
Oil market: riding the waves of uncertainty
The ups and downs of the oil markets caught the attention of both long-term investors like Warren Buffett, as well as of day traders who favour volatility. With ongoing political tensions, there is a good chance for more action in this unpredictable market.
Crude oil prices may continue to rise 2024’s second quarter but they remain subject to the considerable near-term uncertainty that dogged them as the year got under way.
Bitcoin’s comeback: what is next?
Bitcoin is gearing up for a big 2024, with new products such as the newly approved spot Crypto ETF as well as the much-anticipated Bitcoin halving event which takes place once every four years. In the first quarter of 2024, these eleven ETFs bought a net $12.1 billion worth of Bitcoin – $26.8 billion inflows vs. $14.7 billion outflows.
Bitcoin, the pioneering cryptocurrency, is known for its decentralized nature and has become a prominent digital asset, influencing the financial landscape with its potential.
Treasury bond ETFs: a smart move with US rate cuts?
Expecting lower interest rates in the US, could Treasury Bond ETFs be a smart pick? The answer will depend on actual rate cuts in the US. Should they happen, investors can expect to see yield increases.
The iShares 20+ Year Treasury Bond ETF (TLT), a popular choice for investors, tracks long-term US Treasury bonds, offering a way to invest in fixed-income securities with the potential for steady returns and risk mitigation. Since it is a long duration ETF, it is sensitive to rate changes and as such, can also benefit from rate cuts.
Tech stocks: the power of AI and the Magnificent 7
Tech stocks had a great run in 2023, thanks to breakthroughs in AI and the performance of seven major tech companies. The Vanguard Mega Cap Growth ETF (MGK), highly exposed to these “Magnificent 7,” is known for its focus on mega-cap growth stocks, offering investors diversified exposure to some of the largest and most influential companies in the market.
The Nasdaq 100 registered significant gains in Q1 2024 also, albeit at a slightly slower pace, climbing by 8.5%, building upon the 14% increase witnessed in the October-December period of 2023.
Something for everyone
The second quarter promises a whirlwind of market forces, setting the stage for exciting online trading opportunities across equities, currencies, commodities, and cryptos. Will the current trends persist, or will fresh players emerge?
Staying informed as we progress into the next quarter and beyond is key to navigating these diverse investment paths.
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