SPUS - 2024 Mid-Year Outlook
2024-07-23 07:34:00 ET
Summary
- We’re seeing a different dynamic in the coming few months leading to the election.
- Recession odds for 2024 have fallen sharply as we get to mid-year (with only 6 months remaining in the year, after all) and as underlying economic growth slows but is not close to going negative.
- The good news is that slower growth is helping to bring inflation down (tighter Fed policy does work), and that should allow the Fed to start easing policy this year (with more easing probable for next year).
By John R. Mousseau, CFA
This is a brief overview of Cumberland Advisors’ thoughts on financial markets as we head into the second half of 2024. We know that there could be some volatility in markets based on this anything-but-normal presidential election year; however, in the end we believe economics will continue to drive markets, and that is reflected in our outlook here as well. We are publishing this the day after President Biden has dropped out of the nomination. We believe that going from here into the Fall there is probably a better chance of election polls narrowing than there was a week ago.
CIO Thoughts – David Kotok, Co-Founder and Chief Investment Officer
In the January 2024 semi-annual Cumberland outlook, I opened my section with this statement:
2024 Mid-Year OutlookIn my opinion, the border and the US labor force are paramount political issues in 2024. The Biden administration has been viewed by many as weak and indecisive, and recurring border failures appear visually on the nightly news without respite. That is one side of the border issues divide. On the other side we witness the Trump harangues against asylum seekers and immigrants with intensely negative rhetoric. Trump has invoked the historical “blood libel” images used in pre-WW2 rhetoric. It is fueled by Trump’s self-appointed acolyte, Stephen Miller, on the other side. This debate flows to the labor markets.