The Wednesday Letter #207 - 2/14/2024

THIS WEEK: The Market in 2024; Supercore Inflation; Multidomestic Consultants; Supreme Court and Colorado; Winning Complacency.

THE MARKET IN 2024

Many prominent strategists were caught wrong-footed by the US market in the past fifteen months. They expected higher interest rates to drag down earnings, the economy and stocks. Their bearish forecasts received monthly confirmation from the ISM manufacturing PMI (and other indicators) which remained below 50 for the entire period, suggesting that the economy was headed for a recession. As a result, most did not anticipate the quick reversal in the tech sector that started in October 2022. In the spring of 2023, they again did not expect that the regional banking crisis would fade without creating an echo in the fall. In the summer, they thought that massive Treasury issuance and rising yields would hold back equities. Finally, the latest surges in Q4 2023 and early 2024 have again surprised and left them searching for new explanations. Many are still looking for the market to peak in the coming weeks and to correct as it did in 2000.

In this vein, the star of the c…