With only a few trading days left, the stock market year 2024 can be summarized. For most savers, the Stockholm Stock Exchange has been a disappointment.
Around 5 percent increase for the OMXS index with two trading days remaining is far from as good as 2023 (an increase of over 15 percent). It is also not close to leading stock markets where, for example, the New York Stock Exchange's S&P 500 index and Nasdaq are up around 27 and 35 percent, respectively, this year.
In the USA, the development has been driven by technology-related companies, the type of companies we do not have on the Stockholm Stock Exchange, but rather cyclical industries such as manufacturing. These have gone weaker or not kept up due to concerns about the business cycle, explains Jon Arnell, investment manager at von Euler & Partners.
Have hesitated
Seyran Naib Fransson, macroeconomist at Skandia, also highlights the fact that interest rate concerns have made foreign investors hesitant about Sweden and Swedish companies.
Many foreign investors have been very cautious about Sweden, precisely because we are so interest rate sensitive. Now that the recovery is expected to be quite strong, I think many will dare to look more at assets here. Just the fact that we have taken such a beating means that the recovery is now expected to be stronger.
Both of them now see a comeback opportunity for the Stockholm Stock Exchange as the Swedish Central Bank is expected to continue to lower interest rates, while Swedish households benefit from real wage increases combined with tax cuts.
Sweden, we believe, will rather turn upwards while the American economy continues to soften. Therefore, we have a slightly more positive view of the Swedish market, says Jon Arnell.
Small savers who choose to save in global index funds have this year benefited from the exposure being mainly to American companies and also a bonus in the form of the weak Swedish krona, notes Seyran Naib Fransson.
If you look at a world index, Swedish companies make up just over one percent, and around 77 percent are North American stocks. Considering the recovery expected in 2025, it may be time to invest in Swedish stocks, assesses Seyran Naib Fransson.
Positive return
Both of them now believe that the stock market year 2025 will yield a positive return, not just for Sweden. Seyran Naib Fransson:
I am still optimistic about the global stock market. Since I do not think you should expect 33 percent return on a global index. Expect a more normal return year, rather around ten percent.
I think the Stockholm Stock Exchange can do relatively better than other exchanges, says Jon Arnell.
Donald Trump's threats of trade tariffs against the EU and China:
What is a bit worrying is that Trump does not have much to lose, really, since he cannot be re-elected and can push quite hard now. Then I think he will keep a pretty high tone and it may not be as bad as expected, says Jon Arnell.
The challenges within the EU, and especially for Germany and France:
I do not think it is a crisis on the way, says Seyran Naib Fransson about the risk of an impending euro crisis.
It is clear that it is serious, especially timing-wise. When Trump takes office in January, you want to have things pretty stable in Europe to be able to counter any potential outbursts.
Inflation development:
That inflation is not coming down, especially in the USA, and if the Federal Reserve pauses its interest rate cuts. It can also affect the Swedish Central Bank, and that is a worry for me, says Seyran Naib Fransson.
