2024 is shaping up to be a transitional year for the Stockholm stock exchange, with a current increase of around 3.8%. However, according to Danske Bank’s strategist Maria Landeborn, the tide could turn quickly.
“When the central bank raised interest rates, we saw a pretty immediate impact here, and the Swedish economy was weaker than many others,” she explains.
With interest rates now being lowered, Landeborn believes it’s a good time to position oneself in the right sectors.
“It’s good for smaller companies when interest rates come down, so capital is not expensive. Then we have the retail sector, which is sensitive to consumption. And consumption has been weak because we pay high interest rates on our mortgages. But if we have more money in our wallets next year, it should benefit the retail sector as well,” she adds.
In the real estate sector, investors have somewhat priced in a decrease in interest rates, but Landeborn thinks there is more room for growth.
As for industrial and manufacturing companies, the outlook is mildly positive.
“We’ve had a weak industrial trend in Europe for over two years. But our view is that it will gradually improve next year as the ECB lowers interest rates. This will benefit Swedish manufacturing,” she predicts.
One significant uncertainty in the market is how Donald Trump’s presidency will unfold.
“What will he do? What will happen to US support for Ukraine? There are still uncertainties that I think will linger for a while. So we’re not quite at this turning point yet,” Landeborn points out.
The Stockholm stock exchange has also lagged behind the American exchanges in 2024. However, in the strategist’s crystal ball, she foresees a positive outlook for both countries in 2025.
“I believe that both the USA and Sweden can perform well next year for slightly different reasons,” she concludes.
In summary, despite the current challenges and uncertainties in the market, there are opportunities for growth and positive developments in various sectors. With careful positioning and strategic planning, investors can navigate the changing landscape and potentially reap rewards in the coming years.