And if you aren’t already, it’s time to get prepared for that incoming stock rally.
In November, CPI rose just 3.1% year-over-year in November, slower than October’s 3.2% rise and down drastically from the 9% peak in the summer of 2022.
In other words, inflation has now dropped from 9% to 3% in just over a year in a steady and consistent fashion.
That’s a pretty powerful disinflation trend. If it persists, inflation should fall firmly back to “normal” pre-pandemic ranges of 0% to 3% by early 2024 – and hit the Fed’s 2% target by March.
It’s a similar story for core inflation as well, which also continues to decline in a steady and consistent fashion. If this trend persists, core inflation will hit the Fed’s 2% target by summer 2024.
And that’s important because several Federal Reserve officials have already voiced their intention to cut interest rates next year if inflation reaches 2%. They believe interest rates are unnaturally high right now and should move lower when the Fed wins the inflation fight.
And we’re confident that’ll happen next year.
So, if the current disinflation trend persists, the Fed will likely cut interest rates throughout 2024.
The Economy Is Set for a Soft Landing
At the same time, the economy continues to stabilize and is actually showing signs of improvement. For example, consumer spending this holiday season has been very strong. So has consumer travel. Clearly, consumers are still out there spending – and they power 70% of the economy. So, as long as they keep spending, the economy will keep turning.
That means right now, we are set for a “soft landing” – the ultra-rare combination of Fed rate cuts without a recession.
And that is the ultimate bullish setup for stocks.
The economy pulled off a soft landing back in the mid-1980s, in 1995/96 and in 1998/99. It achieved a soft landing in 2019 as well.
In each of those four eras, the Fed cut interest rates without the U.S. economy falling into a recession.
And in each of those four eras, stocks soared.
During the mid-1980s soft landing, the S&P 500 rose nearly 70% in just a few short years.
With the mid-’90s’ soft landing, the market soared 90% in a few years.
During the late 1990s’ soft landing, stocks jumped more than 50% in two years.
And after 2019’s soft landing, stocks rallied about 30% in just 12 months.
Point being: Stocks always soar with soft landings.
Today’s inflation report confirms that a soft landing is very likely in 2024 – which, according to historical precedent, means stocks should soar next year, too.
The Final Word on November’s CPI Implications
We’re looking for a major rally over the next 12 months.
Given additional tailwinds from the AI Boom, we think 2024 could be one of those rare “fortune-making” years for investors.
We couldn’t be more excited.
And that’s why tonight at 7 p.m. Eastern, I’m going live with my colleagues, legendary investors Louis Navellier and Eric Fry, to detail our outlook and investment game plan for the promising year ahead.
At the end of that broadcast, we’ll unveil our brand-new portfolio of the best stocks to buy for 2024.
If you want to make the most money possible in the stock market next year, this event is a can’t-miss.
See you tonight at 7 p.m. EST!