Your final reminder for tonight’s big event with our three analysts … inflation cools again, but progress is slowing down … stocks/bonds expect a bull, but oil/gold expect a bear – what gives?

Data released this morning showed inflation cooled again in November as the Consumer Price Index (CPI) slowed to a year-over-year reading of 3.1%. We’ll get to those details momentarily.

First, here’s your final reminder to join InvestorPlace’s expert analysts Louis Navellier, Eric Fry, and Luke Lango at tonight’s Early Warning Summit 2024 at 7 PM Eastern.

The evening’s goal is simple: clearly identify what’s coming next year for the markets and economy, then pinpoint the specific sectors and trends that will benefit, all for the sake of blowing out your 2024 portfolio returns.

Here are some of the topics our experts will be discussing:

• What will happen with inflation next year?
• When will the Federal Reserve cut rates? Where will rates be by this time next year?
• What will be the impact on the economy? Is it fair to say we’ll avoid a recession?
• Which sectors are poised to outperform next year?
• Which trends will make investors the most money?
• What parts of the market do you need to avoid in 2024?

You’ll walk away with a far greater idea of what next year could hold, translating into specific action steps for your portfolio.

And remember, just for joining, you’ll get three bonus stock recommendations to buy right now. These are picks that our experts believe are primed to soar in 2024. One of Luke’s recommendations from last year was Fluence Energy (FLNC), a leading renewables company. It went on to jump 92% between early January and mid-July.

Bottom line: We all want a crystal ball for what’s coming next year and how to position our money for it. Tonight is as close as we get to that here at InvestorPlace.

To join our experts, along with what we expect will be tens of thousands of other investors, just click here, and we’ll see you at 7 PM Eastern.

Returning to this morning’s CPI report, the data showed inflation continues trickling lower

The report wasn’t a dovish gift where the numbers surprised to the downside, but it did show a general continuation of cooling inflation.

Here’s CNBC with the details:

The consumer price index, a closely watched inflation gauge, increased 0.1% in November, and was up 3.1% from a year ago, the Labor Department reported Tuesday. Economists surveyed by Dow Jones had been looking for no gain and a yearly rate of 3.1%.

While the monthly rate indicated a pickup from the flat CPI reading in October, the annual rate showed another decline after hitting 3.2% a month earlier.

Excluding volatile food and energy prices, the core CPI increased 0.3% on the month and 4% from a year ago. Both numbers were in line with estimates and little changed from October.

The questions on everyone’s mind are “how pleased is the Federal Reserve with this progress? And to what degree will this impact the timing and size of rate cuts next year?”

On one hand, the data we’re seeing continue to show cooling inflation. We are making progress, unquestionably.

On the other hand, as you’re about to see, that progress has slowed since the spring/summer.

In the chart below, note how headline CPI (dark blue) has been trading sideways since the summer. And core CPI (light blue) appears to be flattening out as well since October.

If the Fed is serious about getting inflation back to 2%, that sets up the potential for some drama. After all, with headline CPI at 3.1% and core CPI at 4% – and both readings appearing increasingly stubborn – the Fed may not be as quick to pull the trigger on cuts as many analysts hope.

That brings us to tomorrow and the culmination of the Fed’s December FOMC meeting.

What will we learn tomorrow about rate cuts in 2024?

Tomorrow, the Fed releases its latest interest rate policy decision, with the market overwhelmingly expecting rates to hold steady at 5.25%-5.50%.

The more revealing part of tomorrow’s meeting will be the updated “Dot Plot.” This is a graphical representation that shows us each committee member’s anonymous projection of where they believe rates will be at upcoming dates in the future. We’ll be looking for clues about the scope of rate cuts next year.

The most recent Fed Dot Plot was released in late-September. As you can see below, it showed a median projection of just one rate cut in 2024.

Since then, a lot has changed – most notably, cooler inflation data and a continuation of Goldilocks numbers from the labor market.

So, we expect tomorrow’s Dot Plot to show an increased forecast of rate cuts next year, but likely nothing too dramatic. Even though the Dot Plot is anonymous (and fluid), the Fed members are likely to avoid boxing themselves into a corner by leaning too heavily into cuts.

However, Wall Street is increasingly confident that rate cuts are coming – and potentially, lots of them.

We just saw how the September Dot Plot showed a median projection of just one quarter-point cut next year. Well, don’t tell that to UBS. It’s forecasting – wait for it – 11 quarter-point cuts next year.

Behind this is UBS’ belief that the U.S. will fall into a recession in 2024, requiring the Fed to slash rates.

Now, UBS is an outlier in its recession forecast. Most analysts now believe the U.S. will pull off the rare soft landing. But this difference in forecasts brings up an interesting inconsistency about next year that we shouldn’t overlook.

Someone is on the wrong side of this bet

There’s no denying that we’ve seen plenty of Goldilocks economic data this fall. The inflation and jobs reports have threaded the needle – just enough tightening to tamp down inflation, but not so much that we’ve entered a recession.

We can see the expectation of a soft landing most easily in the bond and stock markets. As we detailed here in the Digest last week, following the cool Personal Consumption Expenditures Index (PCE) released on Friday October 27th, the 10-year Treasury yield imploded, while the S&P 500 exploded.

Bond and stock traders were concluding “the Fed has beaten inflation without tipping the economy into a recession, it’s time to embrace risk-on assets again because the Fed will be cutting rates.”

So, from this bond/stock perspective, the outlook is very bullish.

But on the other side of the equation…

Why are oil, gold, and copper priced for a recession?

As I write Tuesday morning, the price of West Texas Intermediate Crude has fallen into the $60s. This is a collapse of more than 25% since late-September.

If the economy is about to softly touch down into a growth environment, why is oil priced for such anemic demand?

Our editor-in-chief and fellow Digest writer Luis Hernandez had a good answer. He pointed out that over-supply could be a reason. The U.S. is pumping 3.2 million barrels of oil per day.

This is true. It’s also true that the global oil market is shrugging off OPEC’s promises to limit oil supply. However, oil in the $60s – even with potential oversupply – doesn’t reflect robust global economic activity that needs this economic lifeblood for healthy growth.

Meanwhile, gold just set a new all-time high of $2,135 one week ago on Monday. It’s pulled back since, but if we’ve skirted a recession and it’s time to embrace risk-on assets, why did this poster child for “risk-off” assets just set a record high?

And what about copper? It’s widely seen as a barometer for the global economy because of its use in just about all manufacturing/construction. Though its price is slightly up since October, it remains in a long-term downtrend, and is roughly 22% below its high from 2022.

Here again, this pricing is inconsistent with a soft-landing narrative.

So, who’s on the right side of this bet?

For the moment, we give the edge to the bond/stock bulls.

That’s because the bond/stock market performance is largely U.S.-specific (ignoring international revenue exposure in the S&P 500 and foreign treasury buyers). But gold, oil, and copper reflect global demand.

So, it’s possible that money is flooding to the U.S. investment markets because we’re about as good as it gets for investors today (and our economy is stronger than most competing global economies).

Meanwhile, the prices of oil, gold, and copper reflect the continued economic sluggishness outside U.S. borders (right now, there are recessions in various EU countries, Australia is on the cusp of one, and China’s economy is sputtering).

Circling back to the top of this Digest, our experts will weigh in on 2024 recession risk as well as oil pricing in their discussion this evening

So, if you want to know how they’re interpreting this inconsistency, make sure to tune in tonight.

For now, in terms of “who is pricing which assets correctly?” all eyes are on the outcome of tomorrow’s Fed meeting. We’ll be looking for clues from the Dot Plot and Chairman Jerome Powell’s live press conference.

We’ll keep you updated here in the Digest.

Haves a good evening,

Jeff Remsburg