Why Small-Cap Stocks Could Outperform in 2024

Why Small-Cap Stocks Could Outperform in 2024

Business

Fundstrat Global Advisors co-founder, Tom Lee, who previously served as JPMorgan’s chief equity strategist, believes that small-cap stocks will outperform in 2024 due to fading inflation and interest rate cuts. Small-cap stocks, which have been negatively impacted by rising borrowing costs, are expected to benefit the most if inflation continues to decrease and the Fed cuts interest rates as forecasted. Lee predicts that small-cap stocks could rise by 50% next year, and he recommends that investors consider looking to smaller companies for potential gains.

The Sahm Rule: A Predictor of Recessions?

The Sahm Rule: A Predictor of Recessions?

Business

The rise in unemployment to 3.9% last month has raised concerns, as it approaches the triggering point of the Sahm Rule, a renowned predictor of recessions. Claudia Sahm, the creator of this rule, explains that despite the increase in joblessness, the rule has not been triggered yet. While reliable, she hopes to see it break as a sign of economic stability.

Rising Youth Unemployment in China Threatens Economy and International Relations

Rising Youth Unemployment in China Threatens Economy and International Relations

Business

The rising youth unemployment rate in China, reaching a record high of 21%, poses significant challenges for the country’s economy and could have implications for the global economy. A major mismatch between job openings and the career aspirations of Chinese youth is contributing to the problem. This issue could strain the US economy, as it heavily relies on China for goods and services. Furthermore, a prolonged youth unemployment crisis in China could lead to civil unrest, political issues, and destabilize trade and supply chains. It is crucial for the Chinese government to take immediate action to address this crisis and secure the country’s economic future.

Experts Warn of Impending Wave of Corporate Defaults and Bankruptcies

Experts Warn of Impending Wave of Corporate Defaults and Bankruptcies

Business

Experts are warning of an impending wave of corporate defaults and bankruptcies that could have significant consequences for the economy. High interest rates are taking a toll on businesses and consumers, increasing the chances of a recession. The number of bankruptcy filings has already surpassed previous years’ totals, and corporate debt defaults are on the rise globally. This trend is putting considerable strain on corporate balance sheets and is particularly challenging for so-called zombie firms. Charles Schwab predicts that the wave of distress will continue and reach its peak by the first quarter of 2024. This wave of defaults and bankruptcies, combined with other warning signs, such as consumers running out of savings, the resumption of student loan payments, and surging bond yields, is raising concerns about a slowdown in the economy.

China Implements Measures to Address Demographic Crisis

China Implements Measures to Address Demographic Crisis

Business

China is implementing measures to address its demographic crisis as the country faces shrinking population for the first time in six decades. The government has introduced cash incentives, promoted early marriages, curbed expensive betrothal gifts, provided medical insurance coverage for fertility treatments, and cracked down on private tutoring. These initiatives aim to alleviate the economic and social impact of an aging population.

Jeff Gundlach Warns of Looming Recession as Bond Yields Soar

Jeff Gundlach Warns of Looming Recession as Bond Yields Soar

Business

Renowned investor Jeff Gundlach warns of an approaching recession as bond yields soar. The narrowing spread between 2-year and 10-year US Treasury yields indicates a severe economic downturn. Gundlach highlights the de-inversion of the US Treasury yield curve as a cause for concern, urging people to be on high alert for a recession. Other experts, including David Lebovitz from JPMorgan Asset Management, share these concerns and predict potential risks in the bond market sell-off.

Education Department Announces $9 Billion in Student-Debt Relief for Borrowers

Education Department Announces $9 Billion in Student-Debt Relief for Borrowers

Business

The Education Department announces $9 billion in student-debt relief for specific groups of borrowers. This relief addresses the challenges faced by borrowers as they resume monthly payments. The announcement reflects the Biden administration’s commitment to fixing the student loan system and providing much-needed relief to millions of borrowers.