One of the “pivotal” trends for 2024 is a likely drop in the equity risk premium (ERP), predicts Kroll in its list of “10 Trends Shaping 2024.” “Even if interest rates stay higher for longer than some anticipate, greater certainty on the interest rate outlook may translate into a lower equity risk premium. Nevertheless, a scenario of ultra-low interest rates is not in the cards for 2024, and overall cost of capital is likely to stay high.” Here's the full list of trends in the Kroll list:

1. An increasingly complex cyber threat landscape;
2. Public-market and private-market economies continue to diverge;
3. AI will be huge and so will the compliance risks;
4. By whatever name, ESG still matters;
5. Interest rates may have peaked, but the wave of distress, restructurings, and bankruptcies is just beginning;
6. Rebounds in M&A activity;
7. Lower equity risk premium likely as equity market risk subsides, interest rate certainty increases, but overall cost of capital still high;
8. Private equity goes Main Street and the rise of retailization;
9. Increased C-suite accountability for governance and supervisory oversight; and
10. Sanctions are the new Foreign Corrupt Practices Act (FCPA).

For some explanation of the trends, click here.