Broker Check
What’s in Store for 2024

What’s in Store for 2024

January 02, 2024

Last year was a volatile year with three distinct periods of market rallies and two significant downturns, but it wrapped up with strong gains for most major stock indexes, and within 1% of the all-time high for the S&P 500. It was a period that confounded the majority of analysts who were calling for a recession and minimal stock market gains. The presidential cycle predictor which historically shows the 3rd year of a president’s term having on average the highest stock market gains was more accurate than analyst expectations for 2023. The second highest stock gains (on average) occur in the 4th year of the presidential cycle, which we are entering into now.

This new year, 2024, could be a year of moderately strong stock market gains with low risk of a bear market (a drop of over 20%). Although there will likely be volatility and smaller drops in the lead up to the presidential election or after the election. Given the current political environment my best guess is that a republican victory could lead to a strong end of the year rally and a democratic victory could lead to a sell off. It’s also possible there may be a strong stock market rally in the first half of the year because of the anticipation of rate cuts by the Federal Reserve. Sometimes the anticipation drives the market higher than the actual event.

Either way, the election and Fed rate decisions will likely be two of the biggest known drivers of the market this year. In addition, there will likely be a few, as of yet unknown, market drivers that will shape the year’s results as well.

Photograph by: Eyestetix Studio on Unsplash

.

.

.

.

.