Daily Brief - 3 Jan 2024

Rocky start for stocks and bonds in 2024

The new year began with a surprising downturn in both stocks and bonds, marking one of the worst starts in decades. Notably, the S&P 500 and long-term Treasury bonds both saw significant drops. Tech giants, who were big winners last year, faced a tough day, with the Nasdaq 100 falling considerably. This shift suggests investors are cautious after last year's strong market rally. Additionally, there's a trend of moving investments from popular stocks to those that didn't do as well last year. This sudden change in the market has left many surprised and cautious about what lies ahead in 2024.

UK business leaders call for rate cut amid low confidence

UK business leaders are asking the Bank of England to lower interest rates to boost a struggling economy, as confidence among them has hit a new low. The Institute of Directors’ Economic Confidence Index dropped significantly in December, showing a lack of optimism about the economy's future. This decrease in confidence has led to talks about a possible interest rate cut as early as May. Despite recent improvements in certain economic areas like inflation, businesses still need more support to grow in 2024. Interestingly, while overall economic confidence is down, UK executives feel more positive about their own businesses.

BYD races ahead of Tesla as top EV seller

China's BYD has overtaken Tesla to become the world's leading electric vehicle (EV) maker, with record sales in the last quarter. Although Tesla delivered more cars than expected, BYD's sales were even higher. This change highlights BYD's remarkable growth, especially in its home market, while it also starts to make its mark in Europe. BYD, supported by Warren Buffett, has leveraged China's resources and its own vertical integration to excel in EV production. Meanwhile, Tesla's price cuts have not been enough to keep pace with BYD, which now aims to expand its global presence.