Key Financial Trends of June 2024

Goldman Sachs Increases End-2024 Target for the S&P 500

Strategists at American investment bank Goldman Sachs have increased their year-end target for the S&P 500 index to 5,600 points. In November 2023, the team first forecast that the S&P 500 would hit 4,700 points by the end of 2024. A month later, they adjusted their prediction to 5,100 points. Then, in February 2024, they raised it again to 5,200 points.

Goldman Sachs’ latest forecast is a 3.1% increase from when trading closed on 14 June. According to David Kostin, Goldman Sachs Research’s chief US equity strategist, the bank increased its target because of “milder-than-average negative earnings revisions and a higher fair value P/E multiple”.

UBS Group and BMO Capital Markets have also forecasted that the S&P 500 would hit 5,600 points once 2024 ends. On the flip side, JPMorgan Chase is bearish on the S&P 500, with the world’s fifth-largest bank believing it will drop to 4,200 points before 2025 comes around.

Ditto for Citi’s 5,100-point target. Should the S&P 500 indeed retreat to this milestone by the end of 2024, it would essentially mean wiping out 10 months of gains. With the US yet to reach its 2% inflation target and interest rates still held at the 5.25-5.5% range as of June, there’s still the possibility of recessionary fears prompting investors to flee.

What This May Mean For You

After performing poorly across 2022, the S&P 500 was back on track in 2023, rising from ~3,853 points to ~4,769 points in the span of 12 months. 2024 is almost identical for the US’ benchmark equity index so far, starting the year at ~4,745 points before closing at 5,431 points on 14 June. There was a slight correction in early-April, but it wasn’t a prolonged drop.

The S&P 500’s sustained recovery is a textbook example of how you should stay invested rather than trying to time the markets. Despite fears of a recession in the US throughout 2023 and in 2024, there wasn’t a time where the markets had a sustained downturn. This is also a lesson to tune out the noise when you invest, and trust your own research.

Related: How to Trade US Stocks in Singapore

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Thailand Aims for 3% GDP Growth in 2024

According to Thailand’s Finance Minister, Pichai Chunhavajira, the country is targeting 3% GDP growth in 2024. His statement came after a meeting between him and other economic ministers on 10 June. As recently as 20 May, Thailand’s National Economic and Social Development Council (NESDC) was projecting a growth rate of 2-3% instead.

Chunhavajira’s forecast comes on the back of an increased tourism target, with 36.7 million travellers expected for 2024. This is 1 million more tourists than Thailand’s initial estimate. He also declared the government will double its disbursement rate of ฿850 billion set aside for public investment in this fiscal year, which ends on 30 September.

Should Thailand achieve its 3% target, it would mark the highest growth it has attained since 2018. Chunhavajira added that the Thailand Board of Investment will urge for more projects to start by the end of the year, with as much as ฿40 billion worth in the pipeline. As for the total worth of approved investment applications, it currently stands at ฿800 billion.

Although Thailand’s economy has been recovering from the COVID-19 pandemic, it’s still some ways away from reaching its recent highs of 4.2% in 2017 and 2018. Additionally, its government’s stimulus plan of ฿500 billion in cash disbursements was delayed multiple times before being set to be implemented in the final quarter of this year.

What This May Mean For You

Thailand is among the world’s top 30 nations by GDP and the second largest economy in Southeast Asia. However, its post-COVID-19 GDP growth has not been encouraging, with 2021-2023’s numbers clocking in at 1.5%, 2.6%, and 1.9% respectively. In contrast, neighbouring Vietnam recorded a 2.6%, 8%, and 5.05% growth from 2021 to 2023.

This may be why investors have shied away from the Thai equity market. In fact, the SET Index—Thailand’s equity benchmark—has been trending downwards since January 2023. If you’re a contrarian investor, this might be time to pounce. What’s more, the Singapore Dollar has been strengthening against the Thai Baht, breaking the S$1:฿27 mark in late-May.

Related: Top 9 Things You Should Never Do While Travelling Abroad

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DBS Plans to Boost Wealth Assets to S$500 Billion By 2026

Southeast Asia’s largest bank, DBS, is planning to boost its assets under management (AUM) for its Wealth Management arm to S$500 billion by the end of 2026. As of 31 March 2024, DBS’ total assets amounted to S$783.2 billion while its wealth assets alone set a record of S$365 billion as of end-2023.

According to Shee Tse Koon, DBS’ Group Executive and Group Head of Consumer Banking Group and Wealth Management, the markets are “kind of at the cusp of a recovery”. He cites global interest rates having hit their peak as a reason behind this, adding that when rates do drop, the markets will pick up.

Furthermore, DBS aims to have twice the clients who have an AUM of at least S$1 million by the end of 2026. Shee stated that across the past two years, the lender increased its base of high net worth clients by over 50%. This should come as no surprise, considering DBS is the bank of choice for over 30% of Singapore’s family offices.

In its report for the first quarter of 2024 back in end-March, DBS announced a set of strong results. From a year-on-year (YoY) perspective, its net profit increased by 15% to hit S$2.96 billion. What’s more, the wealth management fees DBS earned skyrocketed by 47%. The bank attributed this to a stronger market sentiment and an increased AUM.

What This May Mean For You

For DBS’ investors, its performance in 2024 so far is resounding. It started the year trading at S$30.37 per share, and just six months later, rose as high as S$36.15 before spending the rest of early-June hovering around S$35.70. DBS’ latest announcement is encouraging, and the bank is capitalising on the influx of wealth into Asia and Singapore.

However, its main revenue drivers are still concentrated in Asia. Although it’s expanding its wealth management business in Thailand again, it has been mum on other development plans in 2024 when it comes to growing its reach outside of Asia. This might be a cause for concern if you’re thinking about holding DBS’ shares for the long term.

Related: 3 Best Trading Platforms in Singapore With Low-Cost Fees

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The UK Reclaims Top Spot Among Europe’s Equity Markets

On 17 June, the UK reclaimed the top spot from France as Europe’s leading equity market. This came a week after French president Emmanuel Macron called for a snap election amid political troubles in the West European nation. In total, UK stocks are now valued at US$3.18 trillion while equities in France are worth US$3.13 trillion.

Although the UK is also preparing for its own general election in two weeks’ time, the political situation there is more stable. Additionally, an increasing number of UK citizens are believing that the nation’s economy will either improve or stay the same. This belief has been reflected in the FTSE 100 index, which is up approximately 7.8% in the past year.

On the other hand, the CAC 40, France’s benchmark stock index, grew just 4.19% during the same period of time. This lag can be attributed to the month-long dip starting from mid-May 2024. Out of the index’s top constituents—LVMH, TotalEnergies, and Schneider Electric—only the latter posted gains in the past three months.

However, the UK is only the world’s sixth-largest stock market, with US stocks boasting a market cap of over US$54 trillion. On that note, the UK is far from unattractive for investors, especially regarding financial services. Professional services firm EY reported that the UK is Europe’s “most attractive location for foreign direct investment into financial services”.

What This May Mean For You

Several online brokerage platforms in Singapore grant users access to the Euronext Paris stock exchange. Despite the recent dip in French stocks, the CAC 40 is still up by more than 37% in the past five years. The increased selling pressure might be an opportunity for you to buy shares of globally recognised firms like LVMH, L’Oreal, and Airbus at a lower price.

However, do proceed with caution as France’s upcoming snap election rounds on 30 June and 7 July may result in even greater price drops. As with every other investment you make, only part with capital you’re willing to lose completely. During this time, you might also want to take advantage of the UK’s rise and invest in an FTSE 100 ETF or any of its constituents.

Related: 4 Points to Note to Find the Best Online Broker in Singapore

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