Fun Fact: According to the Japanese Health Ministry, the number of babies born in Japan in 2023 fell to a modern-era low of just under 760,000. Meanwhile the number of people dying rose to a record 1.59 million, more than twice the number of births (JPMorgan Asset Management, Dr. Kelly).
This Week's "Noise"
Fed Chair Powell set to appear before Congress this week, ADP® private payrolls and Job Openings and Labor Turnover Survey (JOLTS) report on Wednesday, initial claims on Thursday and the employment report on Friday.
Current Outlook (6 to 12 months)
Market
Another bank, Bank of America, raised its 2024 S&P targets on earnings (FactSet); The stock market has started out the year very strong. We are expecting some consolidation going forward. If the US economy holds up and inflation recedes, the stock market could experience a “melt up”. This means investors will pile in out of fear of missing out (“FOMO”).
Economic
Federal Reserve appears very comfortable leaving rates alone for a while. We will likely have to wait until the 3rd quarter for cuts. Atlanta Fed GDPNow estimate for Q1 growth currently stands at 2.1%, down from prior 3.0% and the early-February peak reading of 4.2%.
Long-Term View (4 to 7 years)
Long term we believe the US economy will continue to outperform other world economies. This is supported by combination of re-shoring manufacturing, new investments resulting from the Inflation Reduction Act, US energy independence, and higher productivity due to the implementation of Artificial Intelligence (AI) software/systems.
We started 2023 predicting the broad stock market would return to the old highs in one to two years. It took only one year. We believe the US stock market should be 40% to 60% higher by the end of 2028. A S&P 500 index of 7,000 to 8,000 appears possible.
Bonds have re-emerged as an important part of asset allocation as yields have risen. We expect a diversified bond portfolio to produce returns 3% to 5% above inflation for the next 5 to 7 years.
“How many millionaires do you know have become wealthy by investing in a savings accounts? I rest my case.” - Robert G. Allen, author and well-known Investment Advisor.
See important disclosures below:
The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.
Any opinions are those of John O’Hare III and not necessarily those of Steward Partners. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected.
Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.
The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system.
The investment strategies discussed are in an investment advisory program in which the client’s Wealth Manager invests the client’s assets on a discretionary basis in a range of securities. Investment Advisory programs are described in the applicable Steward Partners Investment Advisory ADV Part 2, available at https://adviserinfo.sec.gov/firm/summary/283004 or from your Wealth Manager.
Securities and investment advisory services offered through Steward Partners Investment Solutions, LLC, registered broker/dealer, member FINRA/SIPC, and SEC registered investment adviser. Investment Advisory Services may also be offered through Steward Partners Investment Advisory, LLC, an SEC registered investment adviser. Steward Partners Investment Solutions, LLC, Steward Partners Investment Advisory, LLC, and Steward Partners Global Advisory, LLC are affiliates and separately operated. O’Hare Wealth Management is a team at Steward Partners. O’Hare Wealth Management is independently owned and operated.
AdTrax #6415879.3 Exp 3/26