Key Takeaways
- U.S. economic growth is likely to slow as high interest rates weigh on consumers and businesses.
- Hopes that the Federal Reserve will cut rates earlier in 2024 than previously thought have spurred a rally in risk assets.
- The stock market could continue to rally if the Fed loosens monetary policy, which now appears likely, and bond yields stabilize.
- Corporate earnings are set to surge to a record level on a nominal basis, but S&P 500 valuations are high by historical standards.
- Bitcoin and other crypto assets have jumped in 2023 and may gain more retail investor exposure through the potential approval of spot bitcoin ETFs by the SEC.
If 2023 was the year when rising interest rates threatened to bring a recession that never arrived and derail a stock market rally that appears to still have legs, investors are hoping that 2024 will bring stabilization and normalization. However, what is considered stable and normal has…
