Wells Fargo Investment Institute Believes 2024 is a Pivotal Year for the Economy and Markets
07 Diciembre 2023 - 12:00AM
Business Wire
Expected snap back from slowing economy likely in back half of
next year
With Wells Fargo Investment Institute’s (WFII’s) release of its
“2024 Outlook: A pivotal year for the economy and markets,” the
team offers its highest conviction ideas for investors to consider
in the new year. WFII believes the 2024 economic story could be a
tale of two halves for fixed income and equities. The first half
will likely be more challenging as WFII expects instability during
a moderate global economic slowdown (including in the U.S.),
pivoting into a second half that develops into an improving, more
opportunistic environment for investors.
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Wells Fargo Investment Institute 2024
Outlook (Graphic: Wells Fargo)
“More long-term opportunities to put money back to work across
some markets and regions should come as 2024 develops,” said
Darrell Cronk, chief investment officer for Wells Fargo Wealth
& Investment Management. “WFII’s outlook for most of the past
two years has been cautious and focused on selectivity and quality,
with an eye toward a better year next year. That theme continues in
our 2024 Outlook Report.”
“The resilient U.S. economy has been supported by consumer
spending, a strong labor market, and business capital spending. The
journey, however, was more difficult for investors, with the
Federal Reserve (Fed) raising interest rates and tightened monetary
conditions,” added Cronk. “Investors following WFII advice during
2023’s slow-motion slowdown should be able to use accumulated
fixed-income assets to invest later next year.”
Once investors begin to look past the economic slowdown to a
recovery, WFII expects opportunities in a broad early-cycle global
recovery later in 2024. As is often the case, that time will likely
come while the economy is still weak, the Fed is cutting interest
rates, and markets are beginning to anticipate sustainable economic
and earnings growth. Those equity sectors that tie most closely to
the economy’s cyclical turn higher should benefit the most at that
time.
Highlights of WFII’s forecast include:
- Economic crosswinds will net to a moderate U.S. economic
slowdown by the early part of 2024, in our view, lowering the
full-year U.S. GDP (gross domestic product) target to 0.7% in
2024.
- The target for inflation in 2024 is 2.5%. Lagging effects to
cool inflation in the U.S. will continue to make an impact, but the
Fed’s 2% target will likely remain out of reach given the competing
factors of underlying strength.
- Once investors begin to anticipate an economic and earnings
recovery, WFII expects the S&P 500 Index to gain into year-end.
The target range for 2024 is 4,600 – 4,800.
- WFII’s base scenario implies two quarter-point Fed rate cuts in
2024, causing the federal funds rate forecast in 2024 to decline
toward 4.75% – 5.00%.
The full report provides insights about the economy, equities,
fixed income, real assets, and alternative investments. Also
included are economic and market forecasts, where WFII sees
opportunity, and five portfolio ideas. Please see the full report
for detailed information.
Investment and Insurance Products are:
●
Not Insured by the FDIC or Any Federal
Government Agency
●
Not a Deposit or Other Obligation of, or Guaranteed by, the Bank
or Any Bank Affiliate
●
Subject to Investment Risks, Including Possible Loss of the
Principal Amount Invested
Risk Disclosure
Forecasts and targets are based on certain assumptions and on
our current views of market and economic conditions, which are
subject to change.
All investing involves risks, including the possible loss of
principal. There can be no assurance that any investment strategy
will be successful and meet its investment objectives. Investments
fluctuate with changes in market and economic conditions and in
different environments due to numerous factors, some of which may
be unpredictable. Asset allocation and diversification do not
guarantee investment returns or eliminate risk of loss.
The information contained herein constitutes general information
and is not directed to, designed for, or individually tailored to,
any particular investor or potential investor. This report is not
intended to be a client-specific suitability analysis or
recommendation, an offer to participate in any investment, or a
recommendation to buy, hold, or sell securities. Do not use this
report as the primary basis for investment decisions. Consider all
relevant information, including your existing portfolio, investment
objectives, risk tolerance, liquidity needs, and investment time
horizon.
About Wells Fargo Investment Institute
Wells Fargo Investment Institute, Inc. is a registered
investment adviser and wholly owned subsidiary of Wells Fargo Bank,
N.A., a bank affiliate of Wells Fargo & Company.
About Wells Fargo
Wells Fargo & Company (NYSE: WFC) is a leading financial
services company that has approximately $1.9 trillion in assets,
proudly serves one in three U.S. households and more than 10% of
small businesses in the U.S., and is a leading middle market
banking provider in the U.S. We provide a diversified set of
banking, investment and mortgage products and services, as well as
consumer and commercial finance, through our four reportable
operating segments: Consumer Banking and Lending, Commercial
Banking, Corporate and Investment Banking, and Wealth &
Investment Management. Wells Fargo ranked No. 47 on Fortune’s 2023
rankings of America’s largest corporations. In the communities we
serve, the company focuses its social impact on building a
sustainable, inclusive future for all by supporting housing
affordability, small business growth, financial health, and a
low-carbon economy. News, insights, and perspectives from Wells
Fargo are also available at Wells Fargo Stories.
Additional information may be found at www.wellsfargo.com
LinkedIn: https://www.linkedin.com/company/wellsfargo
PM-05282025-6124942.1.1
News Release Category: WF-ERS
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Media Sarah Kerr, 917-588-5919
sarah.kerr@wellsfargo.com
Wells Fargo (NYSE:WFC)
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