Thoughtful Money with Adam Taggart
Felix Zulauf: Stocks To Crash A Gut-Wrenching 40% Next Year?
Dec 10, 2023
In this episode, host Adam Taggart invites Felix Zulauf, founder & CEO of Zulauf Consulting, to discuss the potential market conditions for 2024 and allocation strategies. They highlight concerns about the global economy, excessive liquidity, and potential inflationary problems. They predict a significant decline in the stock market next year after reaching new highs. The chapter also covers investment opportunities, leveraging options in the currency trade, and the importance of relationships in life.
51:26
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Quick takeaways
- Felix Zulauf predicts a significant decline in the stock market in 2024, driven by the high concentration of portfolios in a few stocks known as the 'magnificent seven', potentially reaching as low as 3,000 in the S&P by late summer.
- Zulauf warns that the consensus on the bond market being the most attractive asset to own in the next year might lead to something unexpected occurring, with bond yields expected to decline to around 3.7% in the first half of 2024 before a potential spike to higher highs, creating problems for the bond market.
Deep dives
The global economy and financial markets
According to Felix Zulauf, the global economy is weak, with Europe stagnating or on the verge of recession, and China struggling with structural issues. The US appears to be the only hotspot, but Zulauf expected it to be weaker. He believes that the Federal Reserve added too much liquidity, leading to a mini bull cycle. However, he predicts that the US economy will turn out to be stronger than expected in the first half of 2024, causing problems for the bond market and leading to a decline in the stock market.
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