Market Outlook: What’s Next for 2024?
We’ve been through a lot over the last couple of years, but 2024 is showing signs that things may be turning around.
In 2024, we have had a really good market thus far. We hit new highs on the Nasdaq, the Dow Jones, and the S&P 500 – marking the end of the bear market and a full recovery.
So where do we go from here?
All Eyes on the Fed
The market has struggled with the idea that the Fed has raised interest rates to a point that it could harm the economy.
There has been a lot of back and forth in the market about whether the Fed is going to raise rates too high and send us into a recession. Can the economy withstand the higher interest rates for a longer period of time?
And the market has struggled with recession vs no recession.
We’re now at a point that the expectation is that the Fed is done raising rates.
In fact, the market is building in the expectations that we will have a soft landing or no landing at all, meaning that the higher interest rates are definitely having an impact on the economy.
The question is: Is the market getting ahead of itself by pricing in rate cuts as early as the next Fed meeting in March, despite the fact that Powell said that’s not likely?
Key Factors to Watch
We’ve had reasonably solid economic results from the ISM manufacturing indicators and the gross domestic product indicators, which is the total economic output of the economy.
In fact, those expectations have been raised.
Another positive sign is that we are starting to see the market broaden out, and other sectors of the market beginning to do better.
Once interest rates start to come down, we expect even the small cap or the smaller companies will start to perform better, too.
The other thing that’s driving the market is the AI revolution.
We expect artificial intelligence to continue to drive the tech market and could possibly drive the entire market going forward.
There will be times where we need a little bit of a market correction and profit taking to build a foundation that will help sustain the next move up.
But, overall, we’re pretty confident the markets could continue to do well in 2024.
Check out the video as Mark Sorensen, our Chief Investment Officer, provides further insight into current economic conditions, how AI may rock the market, and where he thinks we’re headed this year.
Plus chart reviews!
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