DFEV - 2024 Macro Predictions: Sideways 2.0

2024-02-09 23:17:00 ET

Summary

• Stocks and bonds historically do not perform well when the Fed tightens monetary conditions, and that’s just what the Fed announced it would be doing at the end of 2021.
• The property market recession has helped pull Chinese prices lower year over year, and that deflationary force affects the world economy.
• Growth stocks had a shockingly good 2023. Stocks in banks and financials have been beaten up.

By Jan van Eck

Let’s look at what to expect this year from the three major forces impacting the markets: monetary policy, government spending and global economic growth.

Dear Fellow Investors,

Our outlook for financial markets in 2023 was “sideways” and “40/60,” or overweight bonds. This strategy worked well until November 2023, when the market suddenly rallied aggressively and priced in Federal Reserve ((FED)) interest rate cuts, which were expected to happen in 2024. It is one of the wonders of the market that it can price in its view of the future so quickly....

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