2024-01-30 03:20:00 ET
Summary
- In my opinion, the border and the US labor force are paramount political issues in 2024.
- The current longevity and depth of the yield curve inversion is not atypical of the inversions that have preceded all recessions in the post-war period.
- The economic unicorn of a soft landing (when the economy slows to around trend growth, unemployment is mostly stable, and inflation is low and stable) is rarely achieved – at least for long.
- After a strong conclusion to 2023, it is reasonable for both domestic and international equity markets to back and fill for a period.
- Our goal is to maintain a higher level of liquidity, allowing for more flexibility while making strategy adjustments going into an interest-rate environment that is expected to transition from tightening to loosening as we advance into the new year.
By John R. Mousseau, CFA
This is a brief overview of Cumberland Advisors’ thoughts on financial markets as we head into 2024. We are coming off an unusual 2023, which was helped by good bond and equity markets late in the year. One of our basic investment tenets is that markets revert to the mean over periods of time, and that is reflected in our outlook here as well.
CIO Thoughts – David Kotok, Co-Founder and Chief Investment Officer
In my opinion, the border and the US labor force are paramount political issues in 2024. This debate flows to the labor markets.
Economist Torsten Slok of Apollo has noted, “Foreign-born employment in the US is back at the pre-pandemic trend, and native-born employment is still 6mn jobs below the pre-pandemic trend… In other words, the post-covid normalization in the labor force participation rate has mainly been driven by immigration.”
Torsten adds that “The same number of retired individuals has remained on trend,” and then he concludes that “The bottom line is that, even taking into account that about 1mn died from covid, there are still around 5mn native-born workers missing.”...
Read the full article on Seeking Alpha
For further details see:
2024 Cumberland Advisors Markets Outlook