BCA Indicators/Model
The Republican Party’s odds of winning the 2024 election will benefit, if anything, from state courts’ attempts to exclude President Trump from primary or general election ballots. Higher odds of a change of ruling party will increase stock and bond market volatility.
Global instability will continue in 2024 – whatever happens afterward. Slowing economies will exacerbate already high geopolitical risk and policy uncertainty stemming from the US election and foreign challenges to US leadership. Overweight government bonds, defensive sectors, the Americas versus other regions, aerospace/defense stocks, and cyber-security stocks.
In our simulations of fairly deep global recessions averaging -1.5% in 2024 global GDP growth, we expect OPEC 2.0 to reduce output enough to offset lost demand. Even so, we find oil prices drop ~ $22/bbl – from ~ $100/bbl in 1H24 to ~ $78/bbl in 2H24. We remain long the XOP and COMT ETFs to retain oil and commodity exposures.
