Stocks Could Rally Over 20% in 2024 If Fed Pivots to Rate Cuts
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The Federal Reserve is signaling possible interest rate cuts in 2024 after aggressive hikes to tame inflation.
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Historically, stocks tend to rise sharply in the 12 months after the end of a rate hike cycle as cuts spur growth.
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The Dow, S&P 500, and Nasdaq returned medians of 17%, 16%, and 20.1% respectively over 12 months after past hike cycles ended.
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Analysts expect acceleration in S&P 500 revenue and earnings growth in 2024, projecting about 8% upside.
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Investors should weigh valuation alongside positive outlooks when buying stocks, as multiples are elevated versus historical averages.