Investment bank’s Chief Market Economist, Peter Cardillo, talks 2024 market prospects for equities, energy, foreign exchange, fixed income, gold, and silver
NEW YORK, Jan. 30, 2024 /PRNewswire/ — Overall, the U.S. economy in 2024 will experience waning inflation, low unemployment, a very mild recession, and positive GDP growth in the second half of the year.
These bits of good year-end market news are courtesy of Peter Cardillo, Chief Market Economist for investment bank Spartan Capital Securities, LLC, which recently released its 2024 Economic Outlook. Every year Spartan Capital analyzes prior year performance across various market sectors along with macro and microeconomic trends and data for the upcoming year and issues its highly anticipated report to investors, shareholders, analysts, and the media.
“Our economic outlook for the first half of 2024 is for a very mild recession followed by a modest recovery in the second half of the year,” Cardillo predicts in the outlook’s summary. “While we see inflation continuing to moderate, we do not expect the Fed’s target rate of 2% to be reached until the later part of 2025. We expect GDP growth in Q1 to be -0.1%, followed by flat to -0.1% in Q2. We expect a pickup in GDP in the third and fourth quarters of around 1.8%.”
Despite the seemingly less than overwhelming numbers on face value, all of this is positive news for investors, says Cardillo, who has more than 50 years of experience in the financial services industry and is renowned for his insights into macroeconomic trends and his ability to uncover investment opportunities that others miss. As a market sector expert on fixed income, precious metals, commodities, and energy, Cardillo’s commentary is frequently featured in U.S. and international media outlets including CNBC World, CNBC Italy, The Wall Street Journal, Bloomberg, NY Times, and USA Today, and published daily in Reuters, CNBC, The Street, Market Watch, CNN Money, and other major business publications.
“Our outlook bodes well for investors in 2024,” Cardillo says of the overall projections in Spartan’s report. “A lot of the volatility and variability in the markets last year is beginning to stabilize, and that means investors’ confidence is likely going to increase going into the new year across market sectors.”
When it comes to equities in particular, Cardillo predicts overall market performance will remain positive in 2024.
“While we anticipate a ‘January effect’ rally in the first few months of the year,” he says, “We think a pullback in the indices can’t be avoided in the later part of Q1. On the other hand, stocks in the second half of the year will likely outperform to the upside as Presidential elections are traditionally positive for stocks.”
Cardillo also believes that gold and silver are destined for another positive year. Despite falling inflation, he explains, investors’ concern over escalating geopolitical tensions in various parts of the world, less than robust global economic activity overall, persistent inflation, high interest rates, and a weaker dollar will all continue to be factors for gold to have another positive year.
“We see the average price of gold in the New Year fluctuating between the $2000 and $2300 level,” anticipates Cardillo. “Many investors are still jittery for a variety of reasons. And as long as there’s instability, gold will perform positively.”
Oil prices, by contrast, are likely to cool off in the first half of 2024 as global demand in general continues to slow, according to Spartan Capital’s outlook. This is despite OPEC+’s continuing efforts to balance out demand by tightening supply. “Barring any serious war factors in addition to what’s already going on in Ukraine and Gaza,” says Cardillo. “We see crude oil in the first six-months of 2024 averaging around the low $70 to mid-$60 range.”
In terms of fixed income, Cardillo predicts another up year. “We see yields hovering around present levels for a good part of the New Year,” he says, “Before a big bond rally commences in the latter part of the year. We see the 10-year TSY benchmark yield fluctuating between 4.25% – 4.60% in the first six months of 2024.”
And despite a slightly weakening dollar in Q1 and Q2, Cardillo predicts foreign exchange will remain strong as well.
“A meaningful correction of 10% or more on the dollar index is not plausible,” he says. “In fact, while the Feds are probably finished raising rates, we do not see the Fed cutting rates until the later part of 2024. A more pronounced recession than expected could force the Fed to take earlier action. But we continue to think the odds of inflation dropping to the Feds target rate of 2% in 2024 is feasible. Therefore, we see the dollar index trading between the 95 – 104 level for in the first six months of the year.”
All in all—given the events, expectations, and uncertainties of 2023—2024 is a year that investors should be thankful to see, concludes Cardillo. Spartan Capital’s founder and CEO, John Lowry, agrees.
“Relative to 2023, we expect the markets overall in 2024 to continue to perform well,” says Lowry of his investment bank’s outlook. “The difference this year will be less uncertainty. Inflation is under control, interest rates have likely peaked, and the U.S. economy overall is strong. Those are all positive indicators for 2024 and beyond.”
Peter Cardillo joined Lowry at Spartan Capital as the firm’s Chief Market Economist in 2018. The research and newsletters his department produces allow clients, traders, and portfolio managers to stay informed about current event news across various market sectors. By analyzing both macro and microeconomic trends, that means Spartan is able to maintain a fast-paced flow of information across the entirety of its firm and execute profitable investment strategies based on research and forward-looking analyses.
Marcela Ortiz Rubio
SOURCE Spartan Capital