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Benzinga
  • 2 years ago
The 2024 Stock Market Outlook will deliver direct insights into the financial landscape as we transition into the new year, featuring expert analyses, discussions on Federal Reserve pivot talks, and a forward-looking exploration of opportunities in 2024.
Transcript
00:00 Let's keep it going with none other than of course Ryan Dietrich, Chief Market Strategist at Carson Group.
00:07 Or should we just call him Statman by now? I mean, we all know he comes always prepared and he has a deck of course ready for us.
00:15 It's always good to have you Ryan. I know that you are the... and I gotta give it to you.
00:19 In my eyes, I look at a lot of analysts out there. You're the number one in the stats game.
00:24 Well, someone's gotta be I guess. But no, it's an honor.
00:30 That's right. It's an honor. I know I've been with you guys a ton this year. Well, honestly for years.
00:35 But this year you've got me on a lot and it's an honor. I'm glad to be back to talk a little bit about what we just saw and maybe what we're going to see next year.
00:41 So thank you for having me.
00:43 Yeah, look, before we get into that, just talking about stats overall.
00:46 Ryan, what is it about stats overall that get you and that's like your way of looking into the markets?
00:53 Yeah, I mean, boy, I can give an hour long answer here.
00:56 But I mean, I started using social media in 2009 and what I discovered when I do tweets and things, people really liked,
01:02 "Hey, you know, the last five times this happened, this happened after it."
01:05 And I kind of just made a move into that realm of looking at where we've been for a potential path of where we're going to go.
01:13 And I've massaged it over the years using technicals, using sentiment, using fundamentals, looking at macro.
01:19 But at the end of the day, I think that's what kind of people gravitated to towards me, looking at seasonality and certain things like that.
01:26 To just kind of tell a story.
01:28 End of the day, I'm a market strategist and I think my job is to tell a story.
01:31 And I get to work with financial advisors and their clients every single day.
01:34 And this stuff's confusing, but you can also make it as confusing as you want.
01:38 So I try to just make it take complex things and make it easy to understand.
01:43 And sometimes, you know, a simple stat like, "Hey, you know, a pre-election year is usually pretty strong."
01:47 And then you back it up and here we are where it's actually kind of played out.
01:50 It doesn't always work. Believe me, I get it.
01:52 When you stack enough of these, Mitch, on top of each other, like a year ago, when I came out with you guys saying,
01:56 "Listen, there's no recession. We're probably going to have a good year. People thought we were crazy."
02:00 But again, there are a lot of bullish points happening this time of year ago that sometimes this stuff can work.
02:05 Yeah, and I think sometimes, you know, with all the confusion that's out in the world,
02:09 sometimes when you just can bring it to the stats, it can make it a little bit clearer.
02:13 Let's talk, of course, about the chaotic journey of 2023, where AI's evolution and the shift from the bear market was very pivotal.
02:21 What standout trends and events influenced the market's trajectory and how might that play into 2024?
02:28 Yeah, hint to that a little bit. I know the first slide I'm showing here.
02:31 I mean, just, you know, what did we look for last year at this time?
02:34 Like, literally the first time in history, market strategists were looking for negative stock returns.
02:38 Well, we had a 20% drop in the S&P 500 last I checked in 2022.
02:43 It would have been extremely rare to have stocks down two years in a row.
02:46 Could it happen? Sure, it could happen.
02:47 '73, '74, three years after the tech bubble burst.
02:51 But if you could avoid a recession and some of the positives we were seeing on the consumer front told us there was no recession coming,
02:57 you know, just that over-the-top negative sentiment.
03:00 I think, you know, we could do this in 10 years. We could look 10 years before.
03:04 If the crowd is always thinking one way, the opportunity could be the other.
03:08 It doesn't mean the crowd can't be right. I want to be very clear there.
03:10 But I think it's the opportunities. And then, of course, I'm sharing the playful, "Is this the next Warren Buffett?"
03:15 I mean, you know, obviously not. The guy's sitting in a jail cell right now.
03:19 But I think it's just, you know, kind of just be aware that there's no one that's always right.
03:23 There's no one that's hopefully always wrong, to be honest, either.
03:25 But there's always going to be these opportunities.
03:27 And once again, this year was just full of opportunities because so many people doubted.
03:31 I mean, in March, you had the regional bank crisis. In October, we had the market in the correction, down 10%.
03:36 Those are normal things. Most years have worries.
03:38 Most years, see stocks pull back a little bit.
03:40 I mean, it happens. And just the amount of fear that continues to come in is what's fascinating to me.
03:45 And from that contrarian point of view, kind of been a reason we've said, you know,
03:49 we're probably still going higher. We still think we are.
03:52 Hey, not a bad side to be on, right? It seems like it was the right side.
03:56 Let's talk a little bit about the statistics, right?
03:59 Of course, you've mentioned this throughout the whole year of 2023.
04:02 It's not like something that's brand new to us.
04:04 But I always think it's one of the most important stats that you bring to us is the statistics on presidential cycles, right?
04:11 And how next year will go. What does the pattern suggest?
04:14 Is it a bullish, bearish sentiment for the market?
04:17 How do you see it, Ryan?
04:18 Yeah, good news. It was very, very bullish this year, and it's moderately bullish next year.
04:23 So the slide I'm showing now is literally one I think I've shared with you guys for like a year now,
04:27 but I just keep dusting it off. And it makes sense.
04:30 You know, this is the four-year presidential cycle broken down by quarters.
04:33 Well, it's normal to see a strong fourth quarter and a midterm year.
04:37 That's what we saw last year. It's normal to have a lot of strength early in a pre-election.
04:41 Everybody knows pre-election years are normally pretty strong.
04:43 It's not perfect. I get it, but normally pretty strong.
04:45 Most of those gains the first half of the year, everybody and their mother was saying, you know, 2023 is not going to be that great in the first half.
04:51 It's the second half. Things are going to get better. We said, would it be something that's the opposite of that?
04:55 That's kind of what's honestly played out here. But again, that's this chart.
04:58 But what I want to focus on here is the next one.
05:01 This is again, looking at the third year of a presidential cycle, actually all four years.
05:05 You know what I think is interesting, Mitch? Midterm years usually aren't very good.
05:08 When you have a new president, well, that checked the box this time, but then check it out.
05:12 You're up like 20% on average when you have a first-term president that third year of a presidential cycle where we are right now.
05:18 What about next year? And again, there's a lot of other stuff to factor in.
05:21 I want to be very clear, but it's just the big picture stuff to think about. Next year, up 12.2% on average.
05:26 You have a first-term president. Oh, by the way, the last 10 presidents election years were higher when it's their first term.
05:33 So again, it's just one of those. It is what it is. We still don't see a recession next year.
05:37 I got some other stuff I'm going to talk about soon. This is just one of those things when everybody, you know, red and blue and election years.
05:43 Everybody gets their heads explode because they either love who's in office, hate who's in office, whatever it is.
05:47 I just want to be very clear. You should care, of course, about what Washington's up to.
05:51 Want to make that clear. You should vote and do all that stuff.
05:53 But when it comes to your investments, one of the best things you can do is I hate to say this,
05:58 almost ignore what Washington is up to because again, a lot of people hated, you know, President Trump.
06:03 Stocks did well. A lot of people, people hated President Biden. Stocks did pretty well.
06:06 A lot of people haven't liked, you know, President Biden, President Obama.
06:09 Sorry, President Obama didn't like him. Stocks did well. We've had opportunity on President Biden.
06:13 So this will be very clear that this election year is probably going to be pretty darn good
06:17 because the economy is going to be better than people think, and it doesn't really matter who's in the White House.
06:20 So it's a sad, sad truth. Maybe not even sad. It's just the truth, the way this stuff works.
06:25 Yeah, and the numbers don't care, right? The numbers don't care.
06:29 So I think that's an important outlook here that you're bringing, Ryan,
06:32 is that the numbers aren't telling us that it's Republican or Democratic, that that's why I need to get in here.
06:38 It's just more long-telling the cycle.
06:40 And I'll just jump in. I don't have this, but it's, you know, the definition of gridlock, right?
06:44 When you have a very close House and a very close Senate like we do right now,
06:48 you're not going to have these big sways. You're not going to have major blue waves or red waves
06:52 or all the different things that whatever party believes in and spending money and pushing it through.
06:56 We have gridlock right now. We're probably going to have gridlock again in a year when all these elections come through.
07:00 I'm not sure who's going to win the election. I'm just saying the way the House and Senate make up.
07:03 When you have gridlock, that can be a positive thing, and stocks tend to do well.
07:07 A lot of other things to look at, sure, but again, gridlock can be a good thing when it comes to Washington.
07:13 Of course, we had the Magnificent Seven or the Elite Eight.
07:17 I know some people like to refer it like that, the narrative of that it heavily influenced the 2023 rally, right?
07:24 And do you foresee these stocks maintaining their dominance or do you anticipate a broader market surge taking precedence?
07:32 I think we're still seeing some of that right now.
07:34 Yeah, we think of more broad broadening out. I mean, yes, those seven stocks are big deal.
07:40 I mean, you look at technology, communications, both up, I don't know, 40% for the year, maybe a little bit more by the time people hear this.
07:46 So great years and a lot of those stocks did that.
07:48 But we hear, you know, it's only seven stocks, it's only seven stocks.
07:50 We disagreed. I mean, literally a week ago, the NYSE advanced decline line made a new all-time high.
07:55 It's hard to think only seven stocks are doing that when it's looking at the whole, you know, the whole, the whole, the whole package there.
08:01 The chart I'm sharing, though, is a really interesting one. It's how many stocks are making a new 20-day high.
08:05 Okay, a couple of Fridays ago, we saw more than 60% of all the stocks in the S&P 500 make a 20-day high.
08:11 That doesn't sound like just seven stocks to me. That sounds like a broadening out.
08:14 It sounds like a lot of stock participation, a lot of stocks going higher.
08:17 What does it mean? Well, again, it's one of those, it is what it is.
08:20 Thanks to data from our friends at Ned Davis Research, went back to 1972.
08:24 That's a far back day of data. That's what I did.
08:26 One year after you see these big surges in stocks making a 20-day high, Mitch, the S&P is higher 15 out of 15 times.
08:33 And let me just glance, what is it? It's 18% on average a year later.
08:37 Now, again, who knows, you know, but hey, you start stacking these things on.
08:41 I've mentioned some of these other numbers before. If you follow me on Twitter, @X, you know, I've pointed these out.
08:45 But this is a really powerful one to me when we kind of said, "Eh, seven stocks? I'm not so sure."
08:51 And this broadening out theme is definitely one that we like small and mid-cap.
08:54 So I'm going to talk about that in a little bit here.
08:56 But we do see this market broadening out, which is not going to be the end of the world.
09:00 Just the other day, we had all seven of those stocks down, but the stock market up.
09:03 That's pretty darn rare, but again, maybe it's a sign that, you know, the times are changing a little bit.
09:08 I'm going to be very clear. We're even with technology.
09:10 We are a tad overweight communication services, okay?
09:12 So we're not like, I'm not saying I hate these groups.
09:14 I'm just saying there's probably some better opportunities in some of these other areas.
09:17 Last comment a year ago, who really wanted to own tech?
09:20 Honestly, I didn't. I didn't want to own tech. A lot of people did, okay?
09:23 And look what happened. Tech communications did amazing.
09:25 So just because something's hot now does not mean it's going to be hot in one year.
09:29 I know we know this, but when you're in the midst of it like this, sometimes it's hard to remember that.
09:32 So there's going to be some broadening out and a lot of opportunity.
09:34 We think some of the under-loved areas when we get back here in 12 months, in our opinion.
09:38 I'll add this a little later, but I think it's important to just add to that point right now.
09:42 Let's talk about identifying potential outperformers.
09:45 And of course, that's vital, right?
09:47 Every year, we're looking at like the top three sectors and the bottom three sectors
09:51 and wondering, you know, if we're going to get some top performers to stay there
09:55 or maybe will we see a little bit of a shift?
09:58 We all know what happened last year.
10:00 I mean, if you were betting against technology this year, you didn't do so great, right?
10:06 No. No. Well, exactly.
10:09 Yeah, it would have been a rough go of things if you're, I don't know,
10:12 if you had a shirt that said something like, "I love utilities and I hate technology."
10:15 It's been a rough go of things in 2023.
10:18 But again, what I'm sharing here, and this is, hopefully I can use the F for it, this is fundamentals.
10:22 I know we have more traders on this, but, you know, if you think about it, the stock market's expensive.
10:26 The stock market's expensive. Probably a lot of people listen to this.
10:29 They're not so cared of the stock market's expensive.
10:30 You're only holding things for one to three months, maybe even shorter.
10:33 But I'm a little bigger picture guy.
10:34 And I'll say this much. Yeah, stocks are a little pricey.
10:37 Okay, look at technology communication.
10:39 That's what I'm sharing here.
10:40 I mean, they are pricey when you look at kind of where they've been historically.
10:43 But here's the thing that's interesting.
10:45 Small mid-caps are really cheap right now, like historically cheap relative to large caps.
10:49 And okay, just because something's cheap, believe me, I've done this for 22 years.
10:52 I think for 22 years, I've heard emerging markets, you know, they're pretty cheap.
10:56 They haven't really done all that well for the last 22 years.
10:58 Last I checked, relative to the rest of the world.
11:00 So just because something's cheap doesn't mean we want to go into it.
11:02 We want to look at it a little bit.
11:04 And I know I've got some charts and we'll talk about inflation things.
11:07 We see a lot of reasons. Inflation is coming back down.
11:09 The Fed is likely done hiking.
11:11 We have these headwinds, these higher interest rates, which just crushed small.
11:14 It crushes a strong way to put it, but really put a, you know, a hamper, I guess, on small and mid-caps.
11:20 That's out of the way.
11:21 So to answer the question, I'm just going in circles here.
11:23 We are overweight, small and mid-caps.
11:26 We also like financials a lot next year.
11:28 We like industrials a lot next year.
11:29 We do not see a recession.
11:30 We think those are so cyclical areas are the ones that even energy, energy, boy, those stocks, they've been hit pretty hard, right?
11:35 I mean, maybe there's some opportunity there as well in this big pullback we've seen.
11:38 So we like the cyclical areas with a tilt to small and mid-caps,
11:41 because again, those are the areas that are kind of cheap, but have some fundamental drivers, which were headwinds a year ago,
11:46 what the Fed policy did, interest rates.
11:47 Now they're a tailwind. And by the way, last I checked, you know, small and mid-caps,
11:51 they tend to be how your domestic economy is doing.
11:54 We think the economy is on pretty firm footing next year.
11:56 Don't see a recession.
11:57 So we think there's going to be a big catch up in small and mid-caps next year.
12:01 And I think of all eyes will be on kind of looking also to the January effect.
12:05 See if that starts it going, you know, a lot of times we see that get those small caps going,
12:10 but it's definitely an area to watch.
12:11 I mean, you said it right.
12:13 I mean, it used to be kind of hampering and now it could be a tailwind of the new current environment.
12:19 Let's go, of course, to monetary policy.
12:22 What shifts or strategies are likely to unfold in the response to potential inflationary pressures?
12:28 And will we get the famous pivot in 2024?
12:32 Yeah, sure answer. We think there will be the pivot.
12:34 I mean, the Fed is not, you know, always right.
12:38 I guess nobody is okay, but I mean literally 2018 Powell's talking about,
12:43 you know, we're pretty good where things are. Then all of a sudden he starts cutting right away, you know,
12:47 May of this year, they were, I guess, May of two years ago,
12:50 no, it's May of this year, May this year.
12:51 They were talking to Powell about, you know, or just two years ago.
12:53 Sorry, I'll get there. They said, hey, you're gonna do any 75 basis point hikes.
12:56 He was doing 50. They said, I don't see any coming like literally the next month.
13:00 He did a 75 like four in a row. Okay, so let's just be very clear here.
13:04 The Fed's not always perfect and what they're saying.
13:06 Now, we think they're giving some of the tea leaves that inflation is coming back.
13:09 We continue to see the inflation data. I'm sure the one on the left of you guys a lot at shelter.
13:12 Shelter been that stubborn part of overall inflation,
13:15 but the private data rents and Zillow some of those places are showing negative year over year rents.
13:20 That's working its way into some of the government's data.
13:23 So shelter begins to crack down. We don't see too many issues and on the one on the ones on the right.
13:27 He had six months CPI change and also X shelter.
13:30 I mean the bottom line is inflation. I hate to say, you know, was it transitory the whole time,
13:35 you know, maybe just took an extra year to work through all the supply chain issues and things,
13:38 but inflation is coming back and that leads to the next question on this next chart here.
13:42 It's this big theme we have next year about productivity.
13:45 All right, we did we haven't had great productivity in our country for a long time.
13:48 One of the last times we had good productivity without a recession.
13:51 I mean think about 2020 we had high productivity.
13:53 It's like everybody lost their job. And if you're fortunate to keep your job, you were doing a lot.
13:58 You were working really hard. So you're more productive, but that's not the way to keep the economy going.
14:02 So right now we hired five million people last year another ballpark two and a half million people this year.
14:06 People are quitting their jobs like mad a couple years ago.
14:08 Now people are where they're supposed to be. I think now and they're sticking around a little bit longer.
14:12 People are happy with their jobs. AI is out there as well.
14:15 There are some big time similarities with now in the mid 90s mid 90s.
14:19 Of course was the last time we saw strong productivity amongst a the internet revolution,
14:24 which was coming and Greenspan saw that one of the things about 94 Mitch the Fed hike rates a lot in 94.
14:30 You go back in history books as one of the worst years for bonds ever believe me these last couple of been worse,
14:33 but that was a bad year up to that point. Then productivity was high.
14:37 Greenspan understood with high productivity. I just hike rates a bunch.
14:40 I probably can cut interest rates, but we won't go into a recession because the last couple times we've got interest rates.
14:45 What happened? Well, we are in recessions. I mean pandemics a financial crisis lots of bad stuff,
14:50 but now we finally have really impressive productivity coming when you have strong productivity the Fed can cut.
14:55 Usually you can keep wages higher and you don't have a higher inflation issues in the mid in the 70s.
15:02 We have high inflation, but really low productivity.
15:04 So to us put a bow on this if productivity increases like we think it can into next year that opens the door for the Fed to pivot for the Fed to cut.
15:12 We don't even cut a ton, you know, maybe three or four cuts by starting middle of next year.
15:16 It's an election year all the stuff that comes along with that.
15:18 But again, what did the market do in 95 for those of you with your history books?
15:21 Take a look. It sniffed out the Fed cuts well ahead of time and 95 was an amazing year for stocks.
15:26 We don't know if we're going to gain 30% like I think 35% back then.
15:29 I think I don't think we're going to quite gain that much.
15:31 We think potentially, you know, low single-digit returns is what we think is possible next year with again bigger return small mid financials industrials.
15:39 But there's a lot of opportunity here if productivity strong to keep this economy driving and going forward and again inflation and check wages higher
15:49 and they can cut some interest rates which are going to help the mortgage market which is really upset some things.
15:52 So there are some real positives out there. I think if you peel back that onion.
15:56 Definitely keep your eyes on that productivity.
15:58 Nice mention there.
15:59 Let's get to weeks ago, of course.
16:01 Tons of prediction coming for 2024 recession, right?
16:06 They were being yelled out on the street everywhere.
16:08 You look you could hear it now.
16:10 There's some discourse right now.
16:12 Some of them are mentioning a mild economic downturn.
16:16 Are these varying analysts opinion missing the mark or is there substance to these revised forecast?
16:23 Well, I mean, there's always some good info.
16:25 You peel if you look a little closer, but I'll just say this again.
16:28 We don't think there's gonna be a mild recession.
16:30 We don't think there is a recession.
16:31 I might keep some out the landing.
16:32 We were on record saying there wouldn't be a landing because the plane had plenty of fuel and sure enough here we are.
16:36 I mean what I'm sharing on the screen here is just simply forward estimates on the S&P 500 record looking at record earnings next year.
16:42 Now again, that's estimates that can change.
16:45 I get it.
16:45 Also profit margins have stopped going lower and started to improve which is a positive also 12 month CapEx expenditure expectations are high and you know this year clearly housing's been a major
16:57 drag that the Fed interest rates.
16:59 We saw what's happened in the housing market manufacturing's been weak ish, but there are some positive signs.
17:04 I'm going to end with kind of talk about some of those but the consumers been the the strongest part right still making 200,000 jobs every month.
17:11 I mean everyone's upset with inflation.
17:13 We get it.
17:13 You look at the polls where people care about more than darn near anything.
17:16 It's inflation is paying more for stuff.
17:18 People tend to forget though is they're actually making more than inflation.
17:21 I mean and not always I get it but in a lot of cases real incomes are all-time high net wealth.
17:26 Is it on all-time high?
17:27 Yes prices cost more than they did three years ago to do most things but a lot of people are worth a lot more and a lot of people made more money.
17:33 So again, that was one of the reasons a year ago Mitch.
17:35 We were saying the wind be recession because the consumer is still strong.
17:37 So when you stack all these things on top of each other, it just still says, you know, I hate to say it's all the Fed is like, let's give a gold medal.
17:45 I don't think you really did that great of a job.
17:47 I mean, you know, they probably behind the curve a couple different times.
17:50 But at the same time the consumer really deserves the gold medal because they've continued to kind of keep this economy afloat amongst the higher interest rates and now rates are hopefully going to start coming lower.
17:59 It's not perfect.
18:00 There's some people that are obviously struggling.
18:01 But again, there are still just more positives and negatives in our opinion.
18:05 So the mild recession camp we would we'd take the other side of that or whatever the other side of that is and say there's no there's really no recession coming in our opinion led by record earnings, which last I checked usually don't have a recession.
18:16 Oh, by the way, when your stock market makes all-time highs, you can have a recession after that.
18:20 I know there's some sometimes in history, but the majority of the time when the stock market makes new high and last I checked the SPI made new high for like two years.
18:28 Okay.
18:28 I mean, I think it was January 2nd, 2022.
18:30 We're like 5% away.
18:31 So we're going to hopefully make one soon ish.
18:34 Usually you don't have recessions when you go a couple years without a new high.
18:37 It's just some other things about the market tends to lead the economy.
18:40 And I think the strong stock market telling us the economy is gonna be better in 2024.
18:44 Kind of hard to say 2024, right?
18:46 That's the next year, right?
18:47 Yeah.
18:48 All right.
18:48 I asked some of the other analysts this question and experts.
18:52 You say the consumer gets an A.
18:54 What does Powell really get if you had to put a grade on him?
18:57 Oh, I'd say C.
18:58 I mean, yeah, I mean, yeah, he says one thing does the funny thing about Powell, his very first day in office, I believe was February 5th, 2018.
19:06 You can go back and look whatever it was.
19:07 The Dow dropped 4.6%.
19:09 That was his first day at office.
19:11 That was when the whole tariff thing started.
19:13 It's not because of Powell's first day in the office.
19:15 I'd say his first day was an F.
19:16 So he only had one way to go was up.
19:17 You know, worst first day ever.
19:19 And by the way, the Fed, happy birthday to the Fed.
19:21 By the time most people listen to this, the Fed will be 110 years old.
19:24 December 23rd, 1913 was when the Fed started.
19:27 I'm not even sure if honest, I mean, I hate to go down this rabbit hole.
19:30 Is the Fed really done more good than bad or bad than good?
19:33 There's two sides to every story here.
19:34 But yeah, I'd say a C or so.
19:37 I mean, what I do like about Powell, he really seems like he's just telling you what he thinks.
19:41 Okay, there's all these different Fed members giving their opinion.
19:43 I mean, there's so many different Fed members I didn't know existed because they're all over CNBC talking about it.
19:47 But remember Greenspan, he loved talking a whole bunch, but saying nothing.
19:51 I think Powell understands, you know, I don't need to do that anymore.
19:54 We're being more upfront about things.
19:55 And again, I think, you know, they've done an okay job and we've avoided their recession.
20:00 I mean, that's obviously a good thing.
20:02 I don't know if it's because of the Fed or exactly why, but at least, you know, we'll give them, maybe, you know what?
20:07 I'm in a good mood.
20:08 Let's give them a C plus.
20:09 How's that sound?
20:10 All right, you'll get the plus, Jerome.
20:12 I think he'll be feeling good about that one.
20:14 He'll tell his mom it's almost a B, right?
20:16 Almost.
20:17 Finally, how would you summarize, of course, your overall outlook going into 2024?
20:22 Will the optimistic win again in 2024?
20:27 Well, I mean, you look at history and the stock market is up 7 out of 10 years, up 9% on average, right?
20:32 I mean, you're more likely to have a 20% gain in the year than you are down year.
20:36 Go back to 1928.
20:37 There are more 20% gains for the year than there were negative years.
20:41 So I think it makes sense to always be a little bit on the optimistic side.
20:44 Now, sometimes you want to be a little worried or not worried.
20:46 You want to be a little cautious.
20:47 We're not so sure.
20:49 I mean, we've been overweight equities for like a year now and the money that we run for our Carson partners and the Carson Investment Research Team.
20:55 We're still overweight equities.
20:56 We just add a little more equity risk on that pullback in October and everybody's freaking out saying we're marking it into correction.
21:01 We added it.
21:02 So we're putting our money where our mouth is.
21:03 Now, one final thing I want to talk about, the future is bright, sharing this chart here.
21:06 We're with a really smart guy named Sunil Varghese.
21:09 He's our, I'm not sure I get his title right, Chief Global Strategist.
21:13 I'm pretty sure it's his title.
21:14 Just so not too many Sonu's out there in the financial world, but so new.
21:17 He said, these are his charts of the year.
21:18 Just a complete and utter manufacturing boom has been taking place.
21:22 People aren't really talking about this.
21:24 Look on the left, the boom in manufacturing and then in chips.
21:27 Yes, a lot of this is the chips act and certain things, bringing things home, not letting other countries kind of create these high technology things.
21:33 You know, when you have an issue like a pandemic, well, maybe we want our rules, our regulations.
21:37 So we are bringing this stuff home.
21:38 But I mean, everybody likes to rag on the government.
21:40 Trust me, I'm just probably guilty as the next person.
21:42 But I'm not so sure all fiscal policy is bad.
21:44 The chips act and some of the things that we've seen, think about the productivity and some of the things that are going to take place with all these manufacturing and construction that's going on right now in our country.
21:52 We actually get the benefits of those things down the road.
21:55 I think so.
21:55 We really, really positive and manufacturing.
21:57 I think Mitch is like 11% of the essence and not the SMP of the overall economy, right?
22:02 Consumers, two thirds, housing, government spending, all that stuff.
22:05 So manufacturing is not a huge part of used to be like half.
22:08 I mean, back in World War Two, not a shock.
22:09 Our economy has changed, but I just want to be very clear.
22:12 I think, you know, there's there could be a big part of manufacturing.
22:15 If it's that canary in the coal mine, there's going to be some positives coming from manufacturing next year.
22:19 And this is what one final comment we've talked about this before in our shop.
22:22 So the consumer did great.
22:23 Maybe the consumer does slow down a little bit.
22:25 I mean, delinquencies are coming up a little bit.
22:26 Your rates are high.
22:27 I just bought a car for my daughter.
22:28 She turned 16.
22:29 I'm like, oh my goodness, that car does cost a lot more because I'm I saw it real world when you buy a car two years ago compared to right now.
22:35 What interest rates can do to that payment?
22:36 I see it.
22:37 I felt it as well.
22:39 But maybe the consumer pulls back a little bit, but maybe because rates come back down, mortgage coming down, housing could just really be a big explosion in economic growth and manufacturing, which a bit of drag, let's be honest, could be a big plus as well.
22:51 So again, that's just kind of that moving around sloshing around a little bit, but still overall, the economy still is positive with us.
22:57 We'd still side with the optimistic again for this year.
23:00 We do not see a recession.
23:01 We see potentially new all-time highs.
23:03 I mean, I want to be very clear there, but also we're looking between 11 to 13% on the S&P 500, but more from small,
23:08 mid-caps, financials and industrials.
23:10 That's how we're positioning our models and it can change.
23:12 You know, I mean, as the facts change, I changed my opinion.
23:14 What do you do, sir?
23:15 We've all heard that comment lots and lots of times.
23:17 Maybe I'll change my opinion in six months, but that's how we see the world right now in the Carson Investment Research Team.
23:22 Statman, Chief Market Strategist at Carson Group.
23:26 If you're not following Ryan Dietrich, especially on Twitter, I don't know what you're doing in the financial space.
23:33 Always come in with the stats.
23:35 You guys see the charts and we'll of course see you next year, Ryan.
23:39 Get after it.
23:40 Enjoy it.
23:41 Thank you for what your coverage did for us on 2023.
23:45 Definitely uncovering the markets, giving us some great stats.
23:48 Looking forward to what you're going to do in '24, Ryan.
23:50 Take care.
23:51 Always enjoy joining you guys.
23:53 You know, usually it seems like it's Thursday morning.
23:55 I don't know if that's random or not.
23:56 Usually it's on a Thursday morning.
23:57 I look forward to doing a lot more into next year.
24:00 And I mean, believe me, hope is not a strategy.
24:02 I want to be clear.
24:03 But hey, let's hope this bull market keeps going.
24:05 I'll just, I'll just put it like that.
24:06 So thanks Mitch for having me.
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