Inflation has dominated the stock markets for over a year. To the delight of market participants, price increases have recently slowed considerably. Inflation in the eurozone was only 2.4 per cent in November, down from 2.9 per cent in October. In Germany, price increases fell from 3.8 per cent to 3.2 per cent. In the USA, inflation fell to 3.1 per cent in November. We expect the inflation trend to ease further in the coming year and move back towards the central banks' 2 per cent target.

As a result, the era of interest rate hikes by central banks is probably coming to an end. In mid-December, the US monetary authorities signalled in their outlook for 2024 that they want to move in the other direction. On average, they expect the key interest rate to fall by 0.75 percentage points next year.

Investors' rate cut fantasies fuelled Wall Street, with the Dow Jones reaching a new all-time high. The futures markets are now expecting the first rate cut as early as March.

The US economy has proven to be robust despite the tight monetary policy. It grew by an annualised 5.2 per cent in the third quarter. We expect US growth to slow to 2 per cent next year. A soft landing is still a plausible outcome for us. We do not consider the risk of a recession to be particularly high.

Falling interest rates will boost earnings growth. After three years in which profits stagnated globally, we expect growth of eight per cent in the industrialised nations and eleven per cent in the emerging markets in 2024.

We see the stock markets in Europe and Japan as more promising than the broad US market in the coming year. Nevertheless, the "glorious seven" stocks (Microsoft, Apple, Alphabet, Amazon, Nvidia, Meta, Eli Lilly) in the S&P 500, which were almost exclusively responsible for the good performance of US stocks this year, are likely to continue to characterise the market in 2024. These stocks could account for 20 per cent of earnings growth in the S&P 500 next year.

Our top pick for Asia is Japan, both from a valuation perspective and in terms of earnings growth, which is supported by the weak yen. Japanese equities are also a good way to benefit from China's growth opportunities.

In terms of our equity funds, we recommend a mix of 75 per cent R&B Aktien Global Aktiv and 25 per cent R&B NEXT Active Technologieaktien. Our R&B Aktien Global Aktiv fund was the winner of the Austrian Fund of Funds Award Equities in 2023. It achieved the highest performance in the Global Conservative Equities category over a three-year period.