Markets Soar to New Highs, But Risks Lurk in 2024 Outlook
• Markets ended 2023 very strong, reaching new highs, but seem overstretched technically. However, unrelenting liquidity likely to push markets higher in 2024.
• Rate cuts coming from Fed and other central banks should boost liquidity along with potential end to QT and drawdown of Treasury General Account (TGA).
• However, higher inflation remains a risk if supply shocks continue. Energy prices and freight rates have already jumped recently.
• Commercial real estate collapse also poses black swan threat to economy and markets.
• For now, stage set for further market gains in 2024 barring return of inflation or black swan event. Remain bullish.