The Investopedia Express with Caleb Silver

Breaking out the 2024 Investing Playbook as Stocks Touch New Highs

Dec 18, 2023

Liz Ann Sonders, Chief Investment Strategist at Charles Schwab, discusses the 2024 investing playbook and the Fed's rate cut announcement. They explore topics such as interest rates, inflation, recession, and the impact of bond yields on stocks. The importance of high-quality stocks and the Santa Claus rally are also discussed.

27:45

Episode guests

Liz Ann Sonders

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Episode notes

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Quick takeaways

The Federal Reserve's indication of possible rate cuts in 2024 suggests interest rates may have peaked and are expected to lower, causing stocks to rise and bond yields to drop.

Investors should focus on factors and characteristics rather than sectors, as the stock market is showing a broadening of the market with smaller companies and high-quality stocks gaining momentum.

Deep dives

Key Point 1: The Federal Reserve and Interest Rates

The Federal Reserve announced another pause in rate hikes, but what caught investors' attention was the possibility of three rate cuts in 2024. This was the first time the Fed used the word 'any' when discussing additional policy firming since it began raising rates in 2022, implying that interest rates may have reached their peak and are expected to go lower. This news caused stocks to rise, with the Dow gaining 500 points. Bond yields also dropped, resulting in mortgage rates going below 7%.

Introduction

5min

Economic Reports and 2024 Forecast with Lizanne Saunders

8min

Impact of Bond Yields on Stocks and the Influx of Money Into Active Money Managers

6min

Comparing Small Cap Indexes and Factors in Performance

5min

Discussing Favorite Investing Term and the Santa Claus Rally

3min

Liz Ann Sonders, the Chief Investment Strategist at Charles Schwab, tells us what to expect next year for the markets and the economy, and how investors should prepare. Plus, the Fed gave investors an early holiday gift by indicating three rate cuts in 2024, which sent the stock market soaring. But the recent rally hasn't totally convinced individual investors that these gains are here to stay. What are they waiting for?

LINKS FOR SHOW NOTES

https://www.youtube.com/watch?v=hQYXqwNDA88

https://www.investopedia.com/what-to-expect-in-the-markets-this-week-dec-18-8416490

https://awealthofcommonsense.com/2023/12/what-happens-after-a-20-up-year-in-the-stock-market/

https://www.investopedia.com/individual-investors-feel-emboldened-by-the-rally-leaning-more-into-stocks-and-etfs-8416125

https://www.investopedia.com/terms/s/santaclauseffect.asp

https://www.schwab.com/learn/story/market-outlook-whats-store-2024

https://www.schwab.com/learn/story/us-outlook-one-thing-leads-to-another

https://www.investopedia.com/terms/g/garp.asp

https://www.investopedia.com/terms/s/santaclauseffect.asp

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