Recession, Debt Bubble Burst, Black Swan Events: Here's What Wall Street Analysts Want Investors To Watch Out For In 2024

Even with an optimistic outlook for stocks buoyed by a potential interest rate cut by the Federal Reserve, Wall Street analysts are expressing concerns about looming risks as we approach 2024.

According to a Business Insider report on Sunday, analysts are predicting that stocks will hit new highs in the coming year, fueled by the possibility of the Fed slashing interest rates as early as Q1 2024.

However, market experts are warning about possible hurdles that could halt a significant rally in 2024. Wall Street has identified a potential recession, a bursting debt bubble, a major correction in the S&P 500, and an unexpected Black Swan event as the primary risks.

Despite the Fed’s anticipated interest rate cut, there is still a threat of a recession due to the financial tightening that has already occurred. Both French bank Société Générale and BCA Research have warned that stocks may experience significant drops if a recession unfolds.

See Also: Wall Street Banks Readjusts 2024 Interest Rate Predictions After Fed’s Dovish Turn

Universa Investments, a hedge fund, has expressed concern about the potential bursting of an enormous debt bubble, which could be triggered by sustained high borrowing costs, despite the predicted rate cuts.

Furthermore, sections of the S&P 500 seem overvalued, triggering alerts of a severe market correction. Veteran investors Jeremy Grantham and John Hussman have forecasted steep drops in the S&P 500 due to overpricing.

The possibility of a Black Swan event, such as escalating geopolitical tensions, also looms large and could have a significant impact on the markets, as highlighted by economist Nouriel Roubini.

Read Next: Larry Summers Says Fed Has Done Considerable Damage To Itself By Doing This: ‘It’s Premature To Judge That We Have Landed Softly’

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