In part I of this series, credit markets experts from Alvarez & Marsal discussed the economic challenges that 2023 presented, but hinted that 2024 could offer some good news alongside additional financial woes. In part II, the experts look at specific issues credit market watchers should pay especially close attention to this year.
One important factor to watch in 2024 is interest rates. Although rates are expected to increase this year, experts believe that the rate of increase will be relatively moderate compared to previous years. This is good news for borrowers, as it means that the cost of borrowing will still be relatively low. However, it also means that investors may see lower returns on fixed-income investments.
Another key consideration in 2024 is the health of the banking industry. Many banks have recovered strongly from the financial crisis, but there are still concerns about potential vulnerabilities. Experts advise monitoring indicators such as loan quality and leverage ratios to assess the health and stability of the banking sector.
In addition to interest rates and the banking industry, experts also highlight the importance of paying attention to bankruptcy trends in 2024. While bankruptcies have been relatively low in recent years, there are signs that this may change in the near future. Industries to watch include retail, healthcare, and energy, which have already seen an increase in bankruptcy filings.
Overall, while 2024 is expected to bring some economic challenges, there are also opportunities for growth and success. By carefully monitoring interest rates, the banking industry, and bankruptcy trends, investors and businesses can make informed decisions and navigate the changing credit market landscape.
