Market Euphoria is Based on Three Dangerous Myths.
https://www.dlacalle.com/en/market-euphoria-is-based-on-three-dangerous-myths/The world equity markets ended November with their biggest monthly rally in three years. Optimism comes from better-than-expected inflation figures, expectations of central bank rate cuts, and general acceptance that earnings and economic growth will be weak but acceptable in 2024.
The main challenge for investors in 2024 is to confirm these hopes as trends.
The first problem is believing that inflation will drop magically without any significant impact on growth and ignoring monetary aggregates.
Inflation is falling due to the significant decline in money growth, and this means an abrupt slump in liquidity, a weaker economy, and financial conditions worsening.
The euphoria cannot last forever. Once it wears out, it is going to be all hell breaks loose.
