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More From Mish’s Outlook-17 Predictions

December 26, 2023

Mish's Daily

By Mish Schneider

One area I cover in the Outlook 2024 is the teachings of Raymond Lo and how he sees the upcoming Year of the Dragon.

Part of my comments on his analysis is based on this statement by LO:

“Many has the misunderstanding that the Dragon is glamorous auspicious animal and will always bring good luck. To the contrary, Dragon and Dog in the 12-animal system is called the “Gate to Heaven and Hell” or the “Net of Heaven and Hell”.

Hence, 2024 could see gains-we are agnostic and definitely looking to charts-especially junk bonds, small caps and retail.

Interestingly, consumers and whether you call it revenge spending or YOLO, are still very much in the game. Disposal income strong

With certain areas of inflation coming down-although still higher than what numbers suggest-the discussion of the rate hike cycle at the end is controversial

Statistically, there has been a major financial failure at the end of each rate hike cycle since 1965.

Currently, the catalyst for financial stress could be the rising debt, rising spending, geopolitical issues impacting supply chain and a contentious election year.

And anything that gooses inflation will stop the Fed from cutting-

January 2024 will see a new 6-month calendar range reset-this will be very important this time with many predicting the end of the first quarter with a sell off.

Although the stats are on the side of a higher market, this year of the dragon suggests some irritation that could turn the market on its side with more volatility.

17 Predictions:

If Dec SPY closes under 470, January and 460 is key and pivotal
If SPY just hangs in there and does not fail, the small caps and retail can shine. However, gravity always takes over if the sell-off is more severe.
FED keeps rates between 4-6% and TLTs hold a range between 92-105 (unless there really is a recession)
EVs will be the worst place to invest
Growth will go nowhere-not fail or rally-more sideways
While alt energy could make a comeback
Trends for 2024-gold and silver start their last hurrah-we plan to ride the wave, exit and then move on
Industrial metals will do well
Bitcoin goes to 47k then drops to 37k for the start of a new rally into the halving
Oil and NatGas not worth trading for the time being
Consumers that spent the last ½ of 2023 in YOLO or revenge spending, go into vanity mode 2024-Fashion, beauty, skin care, elective surgeries, self-help, maybe dating stocks do well-all about me!
Banks could do well but we need to see regional banks lead
We like Media stocks ROKU SPOTIFY LYV
Infrastructure more thru manufacturing and engineering-especially automation
Healthcare-we see big pharma putting more pressure on govt for medical cannabis use-ABBV top pick
Emerging markets-GREK next leg up. Watching FXI and VNM
Commodities stay muted until the 2^nd ½ of the year-why?
- Geopolitics-supply chain, labor issues-possible recession followed by more inflation
- Natural Disasters
- Debt and government spending
- Dollar in a downtrend
- Misstep by FED in reducing rates too fast or keeping rates flat while CPI picks up
- Pre-election year-generally positive for stocks esp. value

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