Carson Investment Research 2024 Midyear Outlook: Eyes on the Prize
- The economy continues to see a solid rate of expansion with low risk of a recession.
- We are targeting a total return for the S&P 500 of 17-20% in 2024.
- The Bloomberg US Aggregate Bond Index outperforms short-term Treasuries in the second half of the year.
Here we sit at midyear, and many investors should be feeling pretty good. Stocks have had a very strong start to the year, even with some normal bumps along the way. Bonds have been mildly disappointing, but high short-term rates are benefiting savers more than they have in decades. And while bonds have briefly stumbled, some other portfolio diversifiers, including gold, have done well.
Despite it all, markets’ ability to distract the mind and jangle the nerves hasn’t stopped. The aim of our Midyear Outlook 2024: Eyes on the Prize is to stay focused on what matters for investors. But keeping our eyes on the prize isn’t easy. We are built to be distracted by the 24-hour news cycle, by the endless stream of the next comment, meme or video clip of the moment, and more simply just by the demands of everyday life.
Midyear Outlook 2024: Eyes on the Prize provides an overview of our best ideas looking out over the next six months and the broader trends that may carry over much longer, but it’s only a general guide. To understand how it may apply to you so you can achieve your long-term goals, turn to your team and your trusted financial advisors. Ultimately, that’s what lets us focus on the real prize of effective long-term financial planning: taking care of our families, the freedom to live a life of purpose, whatever we choose that to be, and the legacy we leave behind. That’s a prize always worth keeping firmly in view.
SUMMARY OF MAJOR VIEWS
- The economy remains resilient supported by job gains, income growth, and strong consumer balance sheets as well as productivity gains on the business side.
- Inflation will continue to fall, and the Fed will begin cutting rates in the second half of the year, with a base case of two cuts in 2024. The Fed’s view of the “neutral rate” will be revised upward, keeping us in a higher for longer rate environment.
- This young bull market will continue, supported primarily by earnings growth. Economic strength will support more cyclical stocks, while catch-up for undervalued areas of the market may contribute to a broadening rally. Stocks outperform bonds.
- Bonds will be more resilient in the second half of the year as the Fed begins to cut rates. Historically this has been a good time to shift short- term holdings towards more traditional bond allocations.
- Adding diversifying asset classes beyond bonds will remain attractive, as stock/bond correlations may not run as low as last decade in a higher for longer environment.
Get the full outlook from the Carson Investment Research team, including a macroeconomic breakdown, the team’s market views, a look at our leading economic indicators, an election analysis and more!
DOWNLOAD MIDYEAR OUTLOOK 2024: EYES ON THE PRIZE
The views stated are not necessarily the opinion of Cetera and should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.
