fbpx

Your 2024 Outlook

Before we look ahead, we must look back at the year gone by…

Image from Sigarch

2023 Market Recap

In 2022, stocks suffered their worst year since 2008. All 4 major indexes posted deep declines…

But that all changed in 2023. Stocks went on a tear and posted double-digit gains across the board.

  • Dow Jones +13%
  • Nasdaq +43%
  • S&P 500 +24%
  • Russell 2000 +15%

As we enter 2024, the Dow Jones has made new all-time highs in recent weeks, and the S&P 500 came within half a percent of doing the same.

The 2023 recession that everyone predicted never came to fruition. 

It’s our turn to say it … I told you so!

The Expert’s Take

A recent survey found that “more than three-fourths of economists — 76% — said they believe the chances of a recession in the next 12 months is 50% or less” in 2024.

That being said, bear markets and recessions arrive when things no one predicted happen.

Things like…

  • 2001 Dot-com bubble pop
  • 2008 Housing crisis
  • 2020 Pandemic
  • 2022 Inflation
  • 2023 Banking crisis

So, while there is nothing on the horizon that we think will cause a big change in the market. You’ve got to remember that recessions and bear markets can’t be predicted.

The bearish forecasts from 2023 still linger, too. JP Morgan and UBS have both predicted declines in 2024.

But we’re not buying it. As things sit, there is no recession on the horizon.

Politics

It’s a presidential election year.

AP Images

By every historical gauge and economic metric, the Biden administration should be a shoo-in for reelection.

  • Recession avoided
  • Inflation is under control
  • The job market is strong
  • GDP is growing

Despite the facts and figures, recent polls show Biden trailing Trump in a rematch.

Both candidates are unpopular. And that will likely make for a long year of mud-slinging.

The market doesn’t really have a preference for who wins. The market does hate uncertainty.

Expect markets to peak in spring or summer and bottom around election time. No matter who the winner is, the market tends to move higher after the election because it has some certainty.

  • Average S&P 500 return during Presidential Election years … +7%
  • Average S&P 500 return when a sitting President is on the ballot … +12%

The Halvening

Bitcoin’s reward for miners will be cut in half in April 2024. 

Image from Investopedia

Currently, each block reward is 6.25 bitcoins. After the halvening, it will drop to 3.125.

Historically, Bitcoin has seen strong rallies in the months ahead of and after each halvening.

With the creation of a Spot ETF, expect wild swings in the crypto market. 

If the price exceeds $200,000, we’ll be looking to book some profits near 2x the 50-day moving average.

The Fed

The Federal Reserve has 3 rate cuts penciled in for 2024.

Chart from The Fed

Rate cuts are typically bullish. And if we’ve learned anything from the past 3 years, it’s this—Don’t fight the Fed.

There are eight FOMC meetings on the schedule in 2024. The first is set for the final days of January.

Your Take Home

So long as everything remains the same, we expect the market’s current rally to continue until at least April.

The peak will likely happen in Q2.

After that, the market will move sideways or decline into the election.

Expect the market to bottom within a week or two of the November election. Afterward, a new rally will begin, and we’ll issue a new buy alert.

At this moment, we remain long the major indexes. We will issue a sell alert when the wind leaves our sails.

In terms of themes, the hottest themes heading into 2024 are AI and Real Estate. We expect this to change in the year ahead.

Thanks for reading. Happy New Year!