Market Trends & Outlook

As we welcome in the new year of 2024, the inevitability of an economic downturn lingers on the horizon. The question isn’t if a recession will materialize, but rather when its shadow will cast itself upon us.

What is the “wealth effect,” and why is it important? It is a great question and reminded me of “A Funny Thing Happened on the Way to the Colosseum.“ The hysterical play by Craig Sodaro features a naive Swiss farmer heading for Rome.

Sometimes, investors over-complicate the investment process. It’s important to remember to start with the long-term returns shown by markets and compare them to the shorter-term experience.

Most investors have been caught flat-footed and under-exposed to stocks. More and more stocks, sectors and industries are breaking 2-year downtrends with fundamentals positively inflecting after a tough few years of rolling recessions and slowdowns.

Most investors have been caught flat-footed and under-exposed to stocks. More and more stocks, sectors and industries are breaking 2-year downtrends with fundamentals positively inflecting after a tough few years of rolling recessions and slowdowns.

The producer price index (PPI) release, which generally reflects wholesale prices, which ultimately feed into consumer prices, was below estimates on all fronts this morning (including core).

Bonds had a great month in November. Indications that the Fed will pause again were extrapolated into easing expectations as soon as next quarter. Lower yields help the relative valuation of equities, although Factset earnings forecasts are no longer trending upwards.

Securities markets shrugged off a challenging three months and delivered robust gains across the board in November as hopes for a soft economic landing gained ground among investors.