2024 Outlook: 3 Potential Monster Movers
<p><strong>By <a href="http://investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a> </strong></p>
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<h3>Global financial markets are set to be influenced by a cocktail of themes in the new year.</h3>
<blockquote><p><strong>An anticipated pivot by the Federal Reserve to rate cuts, geopolitical risks and the US elections</strong> among other factors could translate to heightened volatility!</p></blockquote>
<p>Here are <strong>3 assets that may see big moves in 2024:</strong></p>
<h3><strong>1) Will SPX500 bull party rollover into 2024?</strong></h3>
<p>After gaining <strong>more than 24% in 2023</strong>, things could spice up for the S&P 500 in the new year due to growing noise around the <strong>US presidential elections in November.</strong></p>
<p>Based on all major polls, there is strong possibility of another standoff between <strong>Biden and Trump</strong>, with the latter currently leading taking a lead.</p>
<ul>
<li><strong>A Biden victory may represent continuation</strong> of the current policy which could be welcomed by markets that lean towards stability and predictable outcomes.</li>
<li><strong>Trump’s possible victory could be accompanied by controversy</strong> with his proven protectionist trade stance straining US-China relations. However, markets may cheer a renewal of his tax-cut policies.</li>
</ul>
<h3><strong><em>Beyond the US elections, look out for:</em></strong></h3>
<ul>
<li><strong><em>Fed rate cuts </em></strong></li>
<li><strong><em>AI-mania: more room to run?</em></strong></li>
<li><strong><em>Corporate earnings supported by lower rates</em></strong></li>
</ul>
<p>Signs of cooling inflation have boosted bets around the <strong>Federal Reserve cutting rates in 2024 </strong>while optimism is growing around the US economy heading for a ‘soft landing’.</p>
<p>As things stand, markets are predicting that the Fed’s benchmark rates will be <strong>150 basis points lower by end-2024.</strong></p>
<p>These expectations along with the <strong>rapid growth of artificial intelligence</strong> may turbocharge tech stocks which account for <strong>roughly 29% of the S&P500 weighting.</strong></p>
<h3><strong>On the flip side…</strong></h3>
<p>The S&P500 may struggle to push higher <strong>if US rates remains higher for longer.</strong></p>
<p>Should the US economy experience a <strong>“hard landing”</strong> this could sour risk appetite, pressuring the S&P500 as a result.</p>
<h3><strong>Technical outlook…</strong></h3>
<p>The SPX500 looks to be trending higher with bulls back in control on the weekly/monthly timeframe.</p>
<ul>
<li>A strong close above <strong>4819.50</strong> could open the doors towards fresh the all-time highs</li>
<li>Should prices dip back below <strong>4600</strong>, this may trigger a selloff towards sticky monthly support around <strong>4170.</strong></li>
<li>Below this point could encourage a further decline towards<strong> 3800 and</strong> levels not seen since October 2022 at <strong>3600.</strong></li>
</ul>
<p><img fetchpriority="high" decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/SPX500_mWeekly_5.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="79722885-1a91-4ee3-9930-9b9939c19842" data-src="/s3-static/users/user17/SPX500_mWeekly_5.png" /></p>
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<h3><strong>2) Bitcoin to $100,000 and beyond? </strong></h3>
<p><strong>The Bitcoin hype could go into overdrive in 2024</strong> amid growing expectations around the United States allowing its first <strong>spot Bitcoin ETF. </strong></p>
<p>Indeed, investors are incredibly hopeful following a wave of applications from asset-management titans, such as BlackRock, coupled with the SEC’s loss in court against Grayscale rejected application.</p>
<blockquote><p><strong><em>In fact, the first batch of US spot Bitcoin ETFs are expected to be approved by January 10th according to Bloomberg Intelligence.</em></strong></p></blockquote>
<p>A spot bitcoin ETF is a big deal as it provides <strong>investors with an easier and supposedly more reliable access</strong> to the world’s largest cryptocurrency without having to purchase it directly.</p>
<h3><strong><em>Halving to turbocharge prices higher?</em></strong></h3>
<p><strong><em>The so-called Bitcoin halving due in April 2024 is also seen as anther bullish catalyst.</em></strong></p>
<p>Historically, the <strong>coin has reached new record highs after the last three halvings.</strong></p>
<h3><strong><em>What is a halving?</em></strong></h3>
<p><strong><em>Bitcoin’s halving will half the amount of tokens that miners receive as reward for their work.</em></strong></p>
<ul>
<li>This happens <strong>every four years,</strong> in this instance miners payout will be <strong>reduced to 3.125 BTC</strong>.</li>
<li>Markets usually view this event positive as it is set to further contract the <strong>supply of Bitcoin.</strong></li>
</ul>
<h3><strong>On the flip side…</strong></h3>
<p>Bitcoin may slip if the ETF approval <strong>takes longer than expected. </strong>Should the <strong>SEC decide to reject all the applications</strong>, the cryptocurrency could experience a heavy selloff.</p>
<p>Even if a spot Bitcoin ETF is approved, the cryptocurrency may respond in a lacklustre fashion if the <strong>ETF fails to attract inflows despite the hype</strong>.</p>
<p>Traders also may end up adopting a ‘buy the rumour, <strong>sell the fact’ </strong>response to <strong>Bitcoin’s halving announcement</strong> with the expected rally to new record highs being delayed.</p>
<h3><strong>Technical outlook…</strong></h3>
<p>Bitcoin is turning bullish on the weekly charts with prices respecting a weekly bullish channel.</p>
<ul>
<li>The next key level of interest is at <strong>$50000</strong>. Beyond this point is the all-time high just below <strong>$69,000</strong> with a breakout above this level perhaps opening a path towards <strong>$100,000</strong>.</li>
<li>Should prices slip back below <strong>$37,000</strong>, this may open the doors towards <strong>$30,000 and $20,000.</strong></li>
</ul>
<p><img decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/BITCOINWeekly_1.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="62900ace-87ec-4b31-b121-56c8a67f602e" data-src="/s3-static/users/user17/BITCOINWeekly_1.png" /></p>
<h3></h3>
<h3><strong>3) Gold set to deliver glittering returns?</strong></h3>
<p>The outlook for gold shines brights in 2024 thanks to fundamental forces but technicals could throw a wrench into the works.</p>
<blockquote><p><strong><em>After surging to a fresh all-time high at $2135 in December, gold bulls could switch things up as the Fed prepares for its first rate cut since March 2020. </em></strong></p></blockquote>
<p>Signs of cooling inflation in the United States and across the world have fuelled speculation for a <strong>global central bank pivot.</strong> This development is likely to <strong>weaken the dollar along with Treasury yields</strong>, keeping gold buoyed.</p>
<p>According to Fed Funds futures, the Fed is expected to cut rates as much as <strong>150 basis points in 2024</strong>, creating an environment for gold to glitter.</p>
<p><em>Note: Gold pays no interest, so lower rates reduce the income foregone by not holding other assets.</em></p>
<h3><strong><em>Keep eye on geopolitical risks…</em></strong></h3>
<ul>
<li>The <strong>Russia-Ukraine war, Israel-Hamas conflict and China-Taiwan tensions</strong> may influence overall sentiment in 2024 – stimulating appetite for safe-haven assets like bullion.</li>
</ul>
<h3><strong>On the flip side…</strong></h3>
<p><strong><em>Gold could tumble if markets have gotten ahead of themselves in terms of US rate cut timings. </em></strong></p>
<p>Most Fed officials have forecast that the US central bank could <strong>cut rates by 75 basis points in 2024, </strong>essentially half the 150 basis points expected by traders. This possible disconnect could spoil the party for gold bulls.</p>
<h3><a><strong>Technical outlook…</strong></a></h3>
<p>Watch out for the <strong>aggressively bearish weekly candle back in December</strong>.</p>
<ul>
<li>Sustained weakness below the <strong>psychological $2000</strong> level may send prices towards <strong>$1935 and $1810</strong> – near the low of 2023.</li>
<li>Should $2000 prove to be reliable support, this may re-open the doors towards the all-time high at <strong>$2135 </strong>and beyond.</li>
</ul>
<p><img decoding="async" class=" lazyloaded" src="https://www.forextime.com/s3-static/users/user17/XAUUSDWeekly_17.png" alt="" width="1000" height="800" data-entity-type="file" data-entity-uuid="95cd10a0-a194-4f26-b492-d5243897cbee" data-src="/s3-static/users/user17/XAUUSDWeekly_17.png" /></p>
<h3><em>Bloomberg’s FX model currently forecasts a <strong>77% chance that GOLD trades within the $1799.07 – $2532.49 range </strong></em><strong><em>during Q4 of 2024.</em></strong></h3>
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<p><img loading="lazy" decoding="async" class="size-full wp-image-54242 alignleft" src="https://www.investmacro.com/articles-analysis/wp-content/uploads/2014/07/Forex-Time-Logo.png" alt="Forex-Time-Logo" width="262" height="90" /><strong>Article by <span><a href="https://www.investmacro.com/contributors/contributor-profile-forextime/">ForexTime</a></span></strong></p>
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