Markets
Market Snapshot: Most Assets Hurting, but One Stock Market Bucked the Trend
Market Snapshot: September 2015
Deutsche Bank recently provided a graphical snapshot that covers the returns of a wide span of assets both YTD and since the mid-August meltdown. In addition, they added some market commentary on the situation investors find themselves in as they get back in gear for the autumn.
First, let’s recap the spring and summer. Chinese markets started the year with gusto, but lost all of the gains during the summer as the bubble burst. Equity markets in the U.S. soon followed, with the Dow shedding almost 2,000 points in August before beginning a small bounce back. Commodities have all been crushed thoroughly YTD and especially in the last two weeks of August.
Despite all of this, there is one stock market that has bucked these trends with outperformance.
That market belongs to Russia, where equities are up 26% on the year and have remained relatively flat since all other markets melted down in mid-August. Russian stocks are not rising because the country’s economy is healthy – they are up because it is less worse than investors thought.
The quick story on Russia: the country is in its worst recession since the Financial Crisis, and had its GDP shrink -4.6% up to Q2 of this year. The ruble has depreciated against the U.S. dollar by 16% YTD, and it also lost plenty of purchasing power last year as oil prices got hammered.
Many spectators had expected the re-emergence of a currency crisis similar to 1998. Adding in possible geopolitical tail risks, publications started to recommend ways to play the Russian crash. Instead, it seems so far that Russia has been able to stabilize better than expected, and as a result stocks have rewarded investors that weren’t so pessimistic.
Economy
Economic Growth Forecasts for G7 and BRICS Countries in 2024
The IMF has released its economic growth forecasts for 2024. How do the G7 and BRICS countries compare?
G7 & BRICS Real GDP Growth Forecasts for 2024
The International Monetary Fund’s (IMF) has released its real gross domestic product (GDP) growth forecasts for 2024, and while global growth is projected to stay steady at 3.2%, various major nations are seeing declining forecasts.
This chart visualizes the 2024 real GDP growth forecasts using data from the IMF’s 2024 World Economic Outlook for G7 and BRICS member nations along with Saudi Arabia, which is still considering an invitation to join the bloc.
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Mixed Economic Growth Prospects for Major Nations in 2024
Economic growth projections by the IMF for major nations are mixed, with the majority of G7 and BRICS countries forecasted to have slower growth in 2024 compared to 2023.
Only three BRICS-invited or member countries, Saudi Arabia, the UAE, and South Africa, have higher projected real GDP growth rates in 2024 than last year.
| Group | Country | Real GDP Growth (2023) | Real GDP Growth (2024P) |
|---|---|---|---|
| G7 | 🇺🇸 U.S. | 2.5% | 2.7% |
| G7 | 🇨🇦 Canada | 1.1% | 1.2% |
| G7 | 🇯🇵 Japan | 1.9% | 0.9% |
| G7 | 🇫🇷 France | 0.9% | 0.7% |
| G7 | 🇮🇹 Italy | 0.9% | 0.7% |
| G7 | 🇬🇧 UK | 0.1% | 0.5% |
| G7 | 🇩🇪 Germany | -0.3% | 0.2% |
| BRICS | 🇮🇳 India | 7.8% | 6.8% |
| BRICS | 🇨🇳 China | 5.2% | 4.6% |
| BRICS | 🇦🇪 UAE | 3.4% | 3.5% |
| BRICS | 🇮🇷 Iran | 4.7% | 3.3% |
| BRICS | 🇷🇺 Russia | 3.6% | 3.2% |
| BRICS | 🇪🇬 Egypt | 3.8% | 3.0% |
| BRICS-invited | 🇸🇦 Saudi Arabia | -0.8% | 2.6% |
| BRICS | 🇧🇷 Brazil | 2.9% | 2.2% |
| BRICS | 🇿🇦 South Africa | 0.6% | 0.9% |
| BRICS | 🇪🇹 Ethiopia | 7.2% | 6.2% |
| 🌍 World | 3.2% | 3.2% |
China and India are forecasted to maintain relatively high growth rates in 2024 at 4.6% and 6.8% respectively, but compared to the previous year, China is growing 0.6 percentage points slower while India is an entire percentage point slower.
On the other hand, four G7 nations are set to grow faster than last year, which includes Germany making its comeback from its negative real GDP growth of -0.3% in 2023.
Faster Growth for BRICS than G7 Nations
Despite mostly lower growth forecasts in 2024 compared to 2023, BRICS nations still have a significantly higher average growth forecast at 3.6% compared to the G7 average of 1%.
While the G7 countries’ combined GDP is around $15 trillion greater than the BRICS nations, with continued higher growth rates and the potential to add more members, BRICS looks likely to overtake the G7 in economic size within two decades.
BRICS Expansion Stutters Before October 2024 Summit
BRICS’ recent expansion has stuttered slightly, as Argentina’s newly-elected president Javier Milei declined its invitation and Saudi Arabia clarified that the country is still considering its invitation and has not joined BRICS yet.
Even with these initial growing pains, South Africa’s Foreign Minister Naledi Pandor told reporters in February that 34 different countries have submitted applications to join the growing BRICS bloc.
Any changes to the group are likely to be announced leading up to or at the 2024 BRICS summit which takes place October 22-24 in Kazan, Russia.
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