Investors should monitor US elections, China's economy, and tech stock valuation for potential risks.

From Investing.com: 2024-08-24 04:24:32

As we enter the second half of 2024, investors are facing a volatile and uncertain landscape. Macquarie analysts highlight three key risks to monitor: the US elections, China’s economic performance, and the valuation of growth and tech equities. The US elections are seen as the most critical, with potential for prolonged uncertainty and market volatility.

A Democratic or Republican sweep in the US elections could lead to significant market disruption. A divided government is viewed as the most favorable outcome to prevent extreme policy measures. However, the fluid nature of the campaigns means outcomes could change rapidly as debates progress and voter sentiment shifts.

China’s economic health is another crucial factor for global markets, with potential implications for supply chains and commodity prices. Any unexpected policy pivots or stimulus measures from Chinese policymakers could increase market volatility. The robustness of China’s response to economic challenges will be closely watched.

Valuation of growth and tech equities is a concern, with fears of overinvestment in sectors driven by enthusiasm for AI and innovation. Analysts at Macquarie note that while growth styles are not yet in “bubble territory,” any unexpected deceleration in earnings growth could trigger a sell-off in high-growth sectors and increase market volatility.



Read more at Investing.com: 3 risks that investors should watch for the second half By Investing.com