Every year analysts offer the outlook for the economy in general and it is updated every day and every quarter to does the company meet expectations. It is a challenge to do consistently because of change in the world, there is always something to react to. If expectations are not met then the stock price will fall and people will decide if the management is doing the right thing or not. The stock market being large means if the stock price falls, various hedge funds will become large buyers to enhance values. If the company meets and exceeds expectations, more individuals will be buyers because they see hope for the future.

In an article by Caroline Valetkevitch of Reuters, the big expectation for 2024 is the federal reserve will cut interest rates as inflation has slowed. However analysts worry about slowing economic growth.

S&P 500 earnings are expected to rise 11.1% after a slow rise of 3.1% in 2023. However analysts believe earnings have to rise because according to LSEG Datastream data the market at the end of December was trading at 19.8 times forward 12-month earnings versus the normal 15.6 times.

The markets ended December with a rally and within striking distance of its all-time high finish. The S&P 500 rose 24.2% for the year. (if you owned energy and big tech, you did well).

Sameer Samana, senior global strategist at Wells Fargo Investment Institute noted the market trading at its current levels demands earnings to show strong growth in 2024.

Gary Bradshaw, portfolio manager at Hodges Capital Management in Dallas noted besides the consumer seems to be healthy, inflation getting better, employment is still strong, interest rates going down, many companies have streamlined their businesses and margins are decent. (in other words companies cut costs and kept good margins).

Linking to dividend paying stocks, in general when interest rates fall, companies which pay dividends are more competitive with other companies for the dividend either stays the same or ideally grows. In addition, possible capital gains are expected because they are able to keep their margins through the cycles to earn profits to pay dividends. It should be a good year.

There are more questions than answers, till the next time – to raising questions.