A Dire Warning for the Stock Market in 2024 😱
As we move further into 2024, warnings about an impending economic crisis seem to be growing stronger. Optimism from January, fueled by expectations of significant interest rate cuts by the FED, kick-started a bull run propelling the S&P 500, Bitcoin (BTC), and gold to new record highs. However, the market appears to be at a turning point, with many voices now forecasting a looming recession.
The S&P’s Impending Collapse and the FED’s Role 📉
In a recent episode of the ‘Thoughtful Money’ podcast, money manager and former FX trader David Brady cautioned that the S&P 500 is heading for a potential collapse of up to 30%. Brady believes that the FED will intervene with rate cuts and quantitative easing to stabilize the situation. He asserts that the primary reason behind the central bank’s efforts to boost equities is the upcoming 2024 election.
- Brady predicts that the S&P 500 may reach new highs before the election but warns that this upward trend will not be sustainable.
- He anticipates a sharp decline in the stock market, with the benchmark dropping to as low as 3,500 points or even lower.
Inflation Concerns and FED’s Dilemma 💸
Brady also expressed apprehension about the recent surge in inflation. With Consumer Price Index (CPI) figures consistently surpassing expectations, even FED Chair Jerome Powell has acknowledged a lack of confidence in meeting the 2% inflation target. A growing number of experts have criticized the FED’s strategy, warning of an imminent inflation crisis. Further discussions about potential rate hikes have resurfaced, indicating a challenging situation for the central bank.
- Gordon Johnson, CEO of GJL Research, has labeled the impending disaster as the ‘most predictable forthcoming inflation crisis ever.’
- The FED faces a dilemma as a deep summer market correction could lead to rampant inflation without rate adjustments. However, increasing rates may trigger echoes of the financial crises of 2008 and 1929.
Hot Take🔥
The warning signs are becoming more alarming for the stock market in 2024. Brace yourself for a potential market collapse and inflation crisis. Stay informed and be prepared for the impact on your investments as significant challenges lie ahead. 👀
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