The Outlook for 2024 By Prabha Natarajan
Welcome to a special edition of this newsletter.
I am Prabha Natarajan, chief editor of WSJ Professional Products, bringing you a comprehensive look at what is ahead this year-from the remaking of private lending to rerouting of supply chains to ramping up of AI tech. [Click through the links below to read the full stories.]
All signs indicate that the U.S. economy is growing and not facing a recession.
Interest rates are expected to come down from their current two-decade high, though at a gradual pace, this year. Inflation is easing and Inflation is easing and employment is holding strong.
This puts companies and executives in a different frame of mind going into 2024 than how they handled 2023.
The Big Picture
New trade routes. Countries and companies may be looking to redraw trade maps that have been built over decades as shipping disruptions continue at two of the world's crucial trade corridors-the Panama Canal and the Suez Canal. Geopolitical tensions also are set to take a more prominent role in sourcing and distribution.
Different strokes for different folks. Companies weighed down with too much debt may be able to avoid bankruptcy in 2024 . In addition to a potential easing of rates, there still is a lot of private capital looking for investments. But technology and venture-capital-backed companies will continue to face financial challenges.
Valuation question. Venture-fund managers are trying to figure out valuations of startups , especially when those marks appear high. And, limited partners would like to see those answers before they back more funds.
Private equity stalls. This hesitation is spilling over into private-equity fundraising too. The cycle that fueled private equity's unprecedented growth over the past decade-plus is broken. Firms are preparing for a longer downturn by closing laggard lines of business or underperforming offices, while trying to reorient their fundraising operations to take advantage of money sources, such as family offices in Dubai.
Companies are profitable. Corporate profits are improving, as inflation cools and companies adjust to high input costs and, in some cases, slowing demand. That is bolstering prospects for stronger M&A activity .
The Corporate Perspective
CIOs are pouring dollars into new technologies like AI in 2024, but that comes from cutting costs elsewhere as spending isn't likely to increase by much this year.
Will this be the year the SEC releases its climate-disclosure rule? Companies continue to wait for an array of new and developing rules, including understanding complicated criteria such as double materiality.
This year's presidential election will enter full swing against a backdrop of political polarization . With tensions high-and partisans frequently taking their grievances to the streets-some business leaders and advisers are looking warily at the risks.
Ransomware, new malware, and other cyber threats against companies will intensify as both geopolitical adversaries and criminals attempt to steal information and disrupt business.
Lower battery metal prices have made electric vehicles and electrical-grid storage cheaper in the near term, but persistently low prices could delay the investment required to ramp up supply of these key energy-transition materials.
As marketing veers fully into the digital world, specialized digital agencies are either evolving into more full-service shops or specializing further still.
What are your company's priorities for 2024? Write to me .
This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
01-07-24 1037ET
