2024 Outlook-Returning To A Familiar Place

2023 is in the books and the results were mostly encouraging. As we look forward to 2024, we’ve taken the time to outline some of our thoughts about both the past year and the coming months. You can watch Dean and me talk about our outlook for 2024 in the video above.

In 2024, we believe markets will make a definitive turn to a more recognizable place. Where the last two years had investors focused on inflation, market volatility, and striving for a sense of economic balance, we expect to see some return to the previous status quo, characterized by more familiar and steadier economic and market patterns. We’ve seen indications of this reset—receding inflation, rates stabilizing, more modest stock market performance, and go-forward economic forecasts that have been dwindling

It doesn’t mean that 2024 won’t have its own surprises or potential challenges. Reflecting on 2023, we certainly experienced our fair share of unexpected events. There were positives, such as the strength of the U.S. economy and the stock market, despite the Federal Reserve (Fed) raising interest rates. On the downside, we faced a regional banking crisis driven by interest rate risk and saw escalating conflict in the Middle East, reminding us that markets are seemingly constantly overcoming obstacles.

So where does that leave us for the first half of 2024? We do expect the economy to soften mildly, which is what the Fed has been looking for over the past two years. The uncertainty surrounding a potential recession may limit stock gains as 2024 begins, but it could also provide a silver lining if the Fed eases rates as a result.

I’ll end with an interesting perspective as we approach this year. According to Bloomberg news half of the worlds population (nearly 4 billion people) are eligable to participate in an election this year. This includes Elections in Young democracies like Pakstan and Tunisia, but also the UK, Mexico, India, and of course the USA.  We have emphasized before that market’s love certainty. As we face an election year, clarity can come as a new government takes shape and multi-year policy adgendas are put in place.