Stocks Priced for Growth Rebound in 2024, But Rate Hikes Could Disrupt Rally
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Major stock indices like S&P 500 are pricing in strong growth in 2024, while more forward-looking areas like tech are priced to perfection already.
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Pro-cyclical sectors like materials and commodities have yet to price in the expected rebound in growth, so could outperform going forward.
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Leading indicators suggest business growth should pick up through 2024, supporting the rally in stocks overall.
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Long-duration bonds and credit don't seem particularly attractively priced right now based on growth and inflation outlooks.
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Markets are pricing in 3 Fed rate cuts in 2024, but if growth and inflation pick up as expected, a more hawkish repricing could occur.