The stock market has a good track record as a business-cycle indicator, even though last year’s bear market was a false alarm, as investors expected a recession that never came. Since that bear market ended, in October 2022, the stock market has been in a bull market, with its August-through-October weakness simply a correction. Now the Bond Vigilantes and their concerns have retreated, clearing the way for the S&P 500 to rise to our targets of 4600 by year-end 2023 and 5400 by year-end 2024.
Such expected stock market strength jibes with our economic outlook, which presumes that a recession isn’t likely before the end of 2024.
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