As we step into the final stretch of 2023, it's time to reflect on the year and look forward to what the future holds. One of the most surprising developments of this year was the absence of the highly anticipated 2023 recession. With economic experts and analysts predicting a downturn, many were bracing themselves for the worst. However, the global economy demonstrated an unexpected resilience, leaving us to wonder what lies ahead for 2024 🤔.
👋 The Great Recession That Never Came
Throughout 2022 and early 2023, media outlets were filled with predictions of an impending recession. Factors such as rising inflation, supply chain disruptions, and the ongoing pandemic fuelled these forecasts. However, as the year unfolded, it became clear that the global economy was more robust than anticipated.
What were the key factors in averting the recession?
🔮 What Can We Expect for 2024?
While the absence of the ‘great recession’ is undoubtedly good news, it's important to consider what may be on the horizon for 2024. Here are some key factors to watch as outlined by top analysts:
What do you think is in store for 2024? Join in the discussion on Blossom to share your predictions and see what others are saying! 💬
In 2023, the US tech sector was undeniably hot, driven by an investor frenzy for AI stocks, which propelled US tech-heavy benchmarks to market-besting returns. However, what makes this year truly exceptional is that Canada's tech stocks outshone their American counterparts. 🤩
The Canadian S&P/TSX Composite's tech sector saw a remarkable surge of approximately 70%, surpassing the gains achieved by the S&P 500 Index and the Nasdaq 100, both of which recorded gains of less than 60%.
But the story doesn't end there. Toronto's tech sector didn't just outperform its American peers; it also surpassed tech indices in Germany, the UK, France, Japan, Korea, Australia, and China. In fact, CIBC World Markets hailed it as "the best performance globally among technology peers."
📈 A Remarkable Rebound
This impressive performance is even more remarkable when we consider the context. The tech sector in Canada was coming off one of its worst years in over a decade, falling a shocking 52% in 2022. This was far worse than the 24% drop experienced by their American counterparts.
In 2023, the stars of the Canadian tech sector included Celestica Inc., a manufacturer of equipment for AI, and e-commerce giant Shopify Inc., often referred to as "Amazon Junior." Shopify, in particular, made a strong comeback after enduring its worst annual performance since going public, ending the year up a whopping 111%.
📆 What Lies Ahead in 2024
While the Canadian S&P/TSX Tech index has enjoyed a banner year, analysts caution against expecting a repeat of the extraordinary returns in 2024. Predictions indicate that there may be more gains to be had in the US tech sector next year, but the Canadian tech sector remains approximately 30% away from reaching its record highs.
🤑 Huawei reported a remarkable 9% surge in revenue for the year 2023, reaching over 700 billion yuan ($98.7 billion). This impressive growth was driven by a resurgent smartphone business and robust sales in 5G equipment. On a quarterly basis, revenue saw a notable 27% increase, reflecting a sharp acceleration compared to the previous quarter.
📱 Huawei made headlines earlier this year by introducing a smartphone equipped with a sophisticated 7-nanometer Kirin processor, marking a significant achievement for China's tech industry. This move challenged US restrictions aimed at limiting China's technological advancements and ignited discussions in Washington questioning the necessity and effectiveness of these restrictions.
🤖 Huawei has also emerged as a major player in the semiconductor industry, a sector of particular interest to the US. The company is establishing a network of chip plants and has received approximately $30 billion in funding from the Chinese government and its hometown of Shenzhen.
👀 Potential IPO in 2024?
Huawei's CEO Ren Zhengfei, who had long maintained that they would never become a publicly traded company, has hinted at the possibility of an initial public offering (IPO) if it aligns with China's national interests. While the company had initially focused on serving broader societal goals, the prospect of an IPO now seems plausible under certain circumstances.
On the final day of 2023, it's time to reflect on the year and look forward to what the future holds.
One of the most surprising aspects of 2023 was the absence of a highly anticipated recession.
🤔 What is a recession?
With high interest rates, inflation, and many other factors placing a great strain on us all, it begs the question if this wasn’t a recession - what is?
That’s the tricky part. One common definition of a recession, ‘two consecutive quarters of negative GDP growth’, already happened in the US in Q1 and Q2 of 2022, but pundits claimed that the true definition is a ‘significant decline in economic activity spread across the economy that lasts more than a few months’ and say that this never happened.
However you want to define it, many economists expected growth to slow sharply in 2023 which evidently didn’t happen. Instead the US economy grew in every quarter and the S&P ended the the year up ~25% (compared to a -20% return in 2022).
"A very high proportion of forecasters predicted very weak growth or a recession," Powell said. "Not only did that not happen, we actually had a very strong year.”
What factors led to this resiliance?
Sectors hit hard during the pandemic, such as liesure and hospitality, contributed to suprising gains in the labour market. Together with healthcare and education, these sectors drove 70% of the job gains.
🔮 What Can We Expect for 2024?
So what’s on the horizon for 2024? Well many predict a return to normalcy, with 3 rate cuts planned for 2024.
"2024 looks like it's an economy which is on its way to normalizing”
Despite this, many Wall Street analysts don’t see as much upside in the market for 2024, with the median target projecting a measly 2% gain in the S&P 500 index.
That said, if 2023 is any indicator, the predictions aren’t always right and we’ll have to wait and see what the new year has in store!
In 2023, the US tech sector was undeniably hot, driven by an investor frenzy for AI stocks. But even with all that growth, Canadian tech stocks actually outshone their American counterparts. 🤩
The Canadian S&P/TSX Composite's tech sector saw a remarkable surge of approximately 70%, surpassing the gains achieved by the S&P 500 Index and the Nasdaq 100, both of which recorded gains of less than 60%.
Canada’s tech sector didn't just outperform its American peers; it also surpassed tech indices in Germany, the UK, France, Japan, Korea, Australia, and China. In fact, CIBC World Markets hailed it as "the best performance globally among technology peers."
📈 A Remarkable Rebound
This impressive performance is even more remarkable when we consider the context. The tech sector in Canada was coming off one of its worst years in over a decade, falling a shocking 52% in 2022. This was far worse than the 24% drop experienced by their American counterparts.
In 2023, the stars of the Canadian tech sector included Celestica Inc., a manufacturer of equipment for AI, and e-commerce giant Shopify Inc., often referred to as "Amazon Junior." Shopify, in particular, made a strong comeback after enduring its worst annual performance since going public, ending the year up a whopping 111%.
📆 What Lies Ahead in 2024
While the Canadian S&P/TSX Tech index has enjoyed a banner year, analysts caution against expecting a repeat of the extraordinary returns in 2024. Predictions indicate that there may be more gains to be had in the US tech sector next year.
Even so, while US tech stocks are at all-time highs, the S&P/TSX composite remains 30% away from its peak.
🤑 Huawei reported a 9% surge in revenue this year, reaching over 700 billion yuan ($98.7 billion), the company’s highest growth in years. This growth was driven by a resurgent smartphone business and robust sales in 5G equipment. Quarterly, revenue grew 27%, a sharp increase from the previous quarter.
📱 Huawei made headlines earlier this year by introducing a smartphone equipped with a sophisticated 7-nanometer Kirin processor, marking a significant achievement for China's tech industry. This move challenged US restrictions aimed at limiting China's technological advancements and ignited discussions in Washington questioning the necessity and effectiveness of these restrictions.
🤖 Huawei has also emerged as a major player in the semiconductor industry, a sector of particular interest to the US. The company is establishing a network of chip plants and has received approximately $30 billion in funding from the Chinese government and its hometown of Shenzhen.
👀 Potential IPO in 2024?
Huawei's CEO Ren Zhengfei, who had long maintained that they would never become a publicly traded company, has hinted at the possibility of an initial public offering (IPO) if it aligns with China's national interests. While the company had initially focused on serving broader societal goals, the prospect of an IPO now seems plausible under certain circumstances.