2024-03-21 12:43:10 ET
Summary
- The market continues to rally in 2024 powered by good fourth quarter earnings reports, solid GDP growth figures and huge enthusiasm for all things AI related.
- However, there are substantial and growing risks to both the markets and the economy that investors are much too complacent about right now.
- These include the continued deterioration of the CRE sector, a worsening situation in Ukraine and worrisome debt levels in an era of much higher interest rates.
- We take a more detailed look at each of these major issues and offer up a portfolio configuration for investors that are rightly cautious around the overall market below.
Civilization thrives in vigilance -- not complacency. ? Michael C. Haymes
There are many potential adjectives that could describe the current state of the market. Overbought, momentum driven, and frothy come to mind. However, the best word to describe the average market participant to me today is ' complacent '.
We entered 2024 with the expectation (according to the futures at the time) that the Federal Reserve would cut the Fed Funds rate five to six times by 25bps a pop. These cuts were supposed to start in March. Now futures are projecting the first cut to happen is a coin flip to start in June. Inflation has proven to be much 'stickier' than hoped so far in 2024. More proof of this came last week in the form of hotter than expected CPI and PPI reports, which pushed the yield on the 10-Year Treasury up over 20bps on the week to 4.3%....
Read the full article on Seeking Alpha
For further details see:
3 Big Risks The Market Is Too Complacent About