Posted 1/4/2024, 10:09:45 AM
Stocks Surge on Economic Strength and Rate Cut Hopes, But Risks Remain
- Recent stock market rally was fueled by strong economic growth, falling inflation, and expectations of interest rate cuts
- Bull run concentrated in tech stocks at first but broadened out recently to include retailers, banks, etc.
- Markets are close to record highs but valuations not as excessive as 2021 peak
- Risks remain including higher inflation, Middle East strife, potential downturns, and uncertainty around Fed policy
- Outlook depends on whether investor’s ideal economic scenario of strong growth and falling inflation is realized