Looking for a bull market in 2024? A record-breaking $5.4 trillion is sitting in cash as of May 31, 2023 signaling a bullish investor sentiment. Past events like the global financial crisis saw vast amounts of cash accumulation which were followed by significant bull runs.
– The flight to cash and cash alternatives like money market funds and short-term Treasuries is a logical response to last year’s tandem decline in stocks and bonds, triggered by rising interest rates, inflation, and slower economic growth.
– In the latter part of 2023, and into 2024 we expect the cash to get deployed initially into the bond markets and then into the stock markets.
– All indications are for a shallow recession (if there is one) in 2023, followed by a rebound in the economy and markets in 2024.
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Source: Capital Group, Bloomberg