Juggling Dynamite

As central banks resume easing in 2024, a bear market bottom should follow months later. Waiting for cyclical lows may feel challenging, but not waiting ends much worse.

Here at the end of 2023, confidence in the economy and the financial markets is a lot higher than it was at this time a year ago. Is that confidence justified? Or will 2024 deliver a rude awakening? Here is a direct video link.

Erik Townsend and Patrick Ceresna welcome ECRI’s Lakshman Achuthan to MacroVoices: “The revival in growth that everyone’s kind of banking on, is not here. The slowdown continues.”

Here is a direct audio link.

Further to the discussion. Unemployment lags the Fed hiking cycle and typically accelerates in the months after the Fed pauses (i.e., anytime now). Central banks go back to easing as unemployment claims move higher (in orange below since 1965), and that’s when equity bear markets intensify (S&P 500 in blue). Chart courtesy of John Hussman.