Today, the U.S. Federal Reserve gave the stock market its ‘blessing’ to keep on rallying. And in so doing, it has also set the stage for stocks to potentially have a monster 2024.
That may sound rather bold. But the rationale behind our bullishness is pretty simple.
To us, the data has long confirmed that the U.S. economy will avoid a recession and, instead, will keep expanding in 2024. Job growth remains robust while unemployment rates remain low. Consumer and enterprise spending are still strong. All the data says the economy is on very solid footing right now.
But those are only half of the ingredients necessary for a soft economic landing. We also need rate cuts.
And today, the Fed confirmed that multiple rate cuts are likely coming in 2024.
That means it’s time for investors to get ready for a major potential rally.
The Fed Is Guiding Toward a Soft Landing
In its new Summary of Economic Projections released this afternoon, the Fed projected that interest rates will drop from 5.4% in 2023 to 4.6% in 2024. That means the Fed itself is calling for 80 basis points of rate cuts next year. Each rate cut is 25 basis points. Therefore, with its projected 80-basis-point decline, the Fed is saying that there will be three or four rate cuts next year.
With this update, the Fed confirmed that we will very likely get an ultra-rare, ultra-powerful “soft landing” in 2024.
In such soft landings, interest rates move lower while the economy continues to expand. Such combinations rarely happen. In fact, the U.S. economy has achieved a soft landing only four times over the past 50 years.
But each time it did, stocks went on to soar.
The U.S. economy achieved soft landings in 2019, 1998/99, 1995/96, and 1984-86. During those periods, interest rates moved lower, and the economy kept expanding.
And in all four soft landings, stocks roared higher, as shown in the chart below.
Today, the Fed confirmed that the U.S. economy will very likely achieve its fifth soft landing next year.
And according to historical precedent, that means 2024 could be a powerhouse year for stocks.
The Final Word
We now have all the ingredients we need for a soft landing in 2024.
And that means you need to do everything you can right now to get prepared for an incoming market rally.
That’s why, last night, I went live with my colleagues and legendary investors Louis Navellier and Eric Fry to detail our market outlook and investment gameplan for the promising year ahead.
At the end of that broadcast, we unveiled our brand-new portfolio of the best stocks to buy for 2024.
If you missed the presentation, worry not. You can catch the replay right now – but only for a limited time.
The earlier you prepare for the 2024 stock market boom, the more money you’ll stand to make next year. Wait too long, and you could see all the potential gains disappear.
