Every year brings new challenges and opportunities for business. In 2024, investors should pay attention to various trends. Will geopolitical risks disrupt business? Will financial services lead the market? Are meme stocks making a comeback or on the back burner? And will interest rates fall? A lot can happen next year.
Looking back at 2023
Before we get into the predictions for 2024, let’s take a look at how my predictions turned out last year.
Inflation continued to be a major problem for families, but began to ease over the course of the year. It is also too early to completely dismiss the possibility of a recession in 2024, although a so-called soft landing seems increasingly likely.
Cryptocurrency also became a major factor in 2023 following the collapse of FTX. The heat has cooled as regulatory scrutiny has increased and investors have grown more skeptical. I feel like the bubbles are finally calming down. However, there is still much work to be done to properly regulate cryptocurrencies.
And in college sports, the NCAA’s new leadership is beginning to make fundamental changes. The coach buyout is still unresolved and the free-flowing transfer portal remains a major issue, but change may finally be coming. The NCAA’s new president, Charlie Baker, has proposed “subsidies” that would allow Power Five schools and others to use NIL funds to pay players directly. And a bill proposed in Congress would finally begin to change course on issues like takeovers and portals. These changes won’t solve everything, but we’ll be watching closely to see how Power Five schools respond.
Towards 2024
meme stocks
The meme stock mania will return in 2023, and while some have learned their lessons about risk, the Reddit crowd will continue to push troubled stocks, and there will still be people willing to bet on them. This will never be incorporated into the institutional investor world, and hedge funds will probably be very cautious at this point. The movement in meme stocks represents a kind of unionization by day traders, and will continue to do so.
China
The United States has long been concerned about China’s use of our technology, and we know that China wants to become the world’s largest economy. That could happen in the next generation or two, and it takes really good intelligence to figure out everything they’re doing to get ahead. Companies will need to include China in their long-term strategies for how they compete, collaborate and protect themselves.
geopolitical risk
While competition with China will be the trend for decades to come, we currently face a uniquely difficult and dangerous set of geopolitical crises. Between the war between Russia and Ukraine, the violence in Israel, and the constant sound of sabers from North Korea, tensions have never been this high in decades. None of this is good, it’s hurting the economy and investor confidence, and I don’t see it ending tomorrow.
recession risk
Markets are likely to slow slightly, and although further rate hikes are possible, the Fed is unlikely to ease rate hikes in the near future. At the same time, lower gas prices have eased inflation, but middle-class and working-class Americans are still experiencing it. Although a major recession is unlikely, a mild recession or soft landing is likely over the next year.
Market trend
The technology sector has led the market for seven of the past 10 years and is likely to continue to do so in 2024. Financial services could also become a goldmine as the yield curve begins to steepen. Financial companies like Schwab, Bank of America, JPMorgan Chase & Co. and Morgan Stanley have had strong years and could even top the S&P 500.
college football
The Power Five is increasingly likely to break away from the NCAA, either gradually through the subdivision proposed by Baker, or by seeking a more complete separation. This largely depends on how quickly the NCAA can establish a new structure and whether it’s financially satisfactory for schools. At the same time, unionization is increasing in college sports, and universities and athletics programs must prepare to negotiate sooner rather than later.
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