The big news over the weekend for financial markets was, of course, MarketWatch 50 member and one-woman economic tailwind Taylor Swift leaping into the arms of Travis Kelce, the Kansas City Chiefs tight end, after a concert in Argentina. The investment implications:
Perhaps more notable are the signs of optimism coming from Morgan Stanley. The team lifted its S&P 500 SPX target to 4,500 for the end of 2024 from 4,200 . They’re expecting cuts from both the U.S. Federal Reserve and the European Central Bank in June next year, and they’re also expecting China to find its footing.
They also recommend a barbell approach of defensive growth and late-cycle cyclicals, citing data showing average returns of 8% when the Conference Board’s leading economic index contracts from peaks of at least 3%, outside of recession. “This is historically a supportive performance backdrop for traditional defensives , select growth opportunities , and late cycle cyclicals ”
The buzz Moody’s late Friday lowered the outlook on the U.S. credit rating to negative ahead of what could be another government shutdown, though the main reason cited was rising interest rates and the lack of fiscal measures to offset them.