What will the economy and stock market do in 2024?

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Experts weigh in with their predictions

If you’ve sampled social media in recent weeks, you may have seen dozens of posts and videos warning of hard economic times ahead in 2024. Many of these points of view are coming from respected investors and economists.

For example, on the “Thoughtful Money” podcast, Jesse Felder, the founder and editor of The Felder Report, a market research firm, warns the elephant in the room is the country’s $30 trillion-plus deficit that he says could pose a big threat next year. 

Should the economy slip into a recession as some expect, he says the result would not be what Wall Street expects.

“Everybody who thinks that a recession will slow the economy and interest rates will come down could be in for a major surprise,” Felder said. “A recession means the deficit blows out even more and Treasury supplies grow dramatically and interest rates actually go up. That’s the thing I’m worried about most right now.”

Recession possibilities

ConsumerAffairs reached out to a number of economists and investors about their views of what could be in store for 2024. Shmuel Shayowitz, president and chief lending officer at Approved Funding, has a bearish outlook that is more in line with Felder’s and believes that the economy will slip into a recession.

“I believe the Federal Reserve will be slow to lower rates early enough to avoid a recession,” he told ConsumerAffairs. “I think the economy will slow with slower growth for big companies and retailers, leading to weaker employment - all of which will have a negative impact on stocks. I predict that overall in 2024, the S&P 500 will perform below its annual averages.

But Robert Johnson, a professor of finance at the Heider College of Business, Creighton University, is more optimistic. He believes a recession in 2024 is unlikely.

“Given the data up to this point it appears that the Fed is successfully engineering the illusion of a soft landing,” he told us. “For all of the criticism that Jay Powell and his colleagues face, they have done an exemplary job in achieving their dual mandate of price stability and full employment.”

Bullish outlook for growth stocks

Ahmed Abdullah Shaikh, strategy and investments manager at Unity Foods, also has a more upbeat outlook. He says growth stocks, that have led the late 2023 stock market rally, should continue in that role.

“Safe bets for the stock market will remain in stocks like Apple and Nvidia, which have poised themselves as the “picks and shovels” in the modern tech gold rush – a vision years in the making,” Shaikh said.

Shaikh also says the S&P 500 will most likely provide a modest 9% return on improved consumer spending as the general public becomes better suited to a relatively higher interest rate environment than it was comfortable with in previous years.

Ryan Detrick is chief market strategist at Carson Wealth. He also sees little chance of a recession next year, with continued growth in stock prices. He expects inflation to fall further as supply chains continue to heal and shelter costs to decline. 

“All of this will open the door for the Fed beginning to cut rates in the second half of the year,” he predicted.

‘Economy on shaky ground’

Joe Camberato, CEO of NationalBusinessCapital.com, a fintech lending marketplace, says he doesn’t see a 2024 recession but concedes there is reason to be cautious.”

"I don't foresee a recession in 2024, but the economy is on shaky ground, and a downturn wouldn't be surprising given the current circumstances,” Camberato said.

He says many factors like interest rates, tightened bank policies, and global conflicts are adding complexity to the situation. If the Fed raises rates again he says it could “absolutely, trigger a recession.” He says businesses and consumers are already strained under existing rates.

Avis Berg is the chief investment officer at Berg Capital & Co. He says 2024 will be a hard year to forecast with many factors potentially influencing the economy and financial markets.

“I'd encourage investors to stay informed, stay flexible, and seek advice from financial professionals when making investment decisions,” he said.

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