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.

Wall Street Rallies to Record High as Fed Signals Possible Interest Rate Cuts

Wall Street Rallies to Record High as Fed Signals Possible Interest Rate Cuts

Business

Wall Street rallied to a record high on Wednesday after the Federal Reserve suggested that interest rate cuts may be on the horizon for next year. The Dow Jones Industrial Average surged over 500 points, surpassing 37,000 and setting a new peak. The S&P 500 and Nasdaq composite also gained, reflecting a positive sentiment towards lower interest rates. The prospect of rate cuts benefits investments seen as expensive, lower quality, or those with longer-term growth potential. Apple was a major driver in the S&P 500’s rise, and tech stocks have been key contributors to the index’s rally this year.

The Outlook for the Global Economy in 2024

The Outlook for the Global Economy in 2024

Business

The global economy is expected to experience a slowdown in 2024 due to factors such as wars, high inflation, and high interest rates. The OECD projects international growth to decline to 2.7% in 2024, marking the slowest year of growth since the onset of the COVID-19 pandemic. While the risks of recessions are expected to be avoided, concerns remain regarding persistently high inflation and the impact of geopolitical tensions on commodity prices. The slowdown is influenced by the deceleration of the US and China, the two largest economies, as well as factors affecting the Eurozone. Despite the challenges faced since 2020, economic expansion has proven resilient. However, the OECD warns that economic growth is now moderating, driven by tighter financial conditions, weak trade growth, and low business and consumer confidence.

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.