Rising Risks in 2024 Could Lead to Increased Stock Volatility
The stock market has been relatively calm in recent years, but JPMorgan Chase & Co. is predicting that this could change in 2024. According to the bank, the combination of rising risks and the potential for a shift in the economic cycle could lead to increased volatility in the stock market.
The Calm Before the Storm
The stock market has been relatively calm in recent years, with the S&P 500 Index experiencing its longest stretch of low volatility since the 1960s. This period of low volatility has been attributed to a number of factors, including the Federal Reserve’s accommodative monetary policy, low interest rates, and the strong performance of technology stocks.
Rising Risks in 2024
However, JPMorgan Chase & Co. is predicting that this period of low volatility could come to an end in 2024. According to the bank, the combination of rising risks and the potential for a shift in the economic cycle could lead to increased volatility in the stock market.
The bank identified a number of potential risks that could lead to increased volatility in 2024. These include the potential for a rise in inflation, a shift in the economic cycle, and the potential for a change in the political landscape.
Inflationary Pressures
One of the potential risks that could lead to increased volatility in 2024 is the potential for a rise in inflation. Inflation has been relatively low in recent years, but the bank believes that this could change in 2024.
The bank believes that the combination of rising wages, increased government spending, and the potential for a weaker U.S. dollar could lead to higher inflation. This could lead to increased volatility in the stock market, as investors adjust to the changing economic environment.
Shift in the Economic Cycle
Another potential risk that could lead to increased volatility in 2024 is the potential for a shift in the economic cycle. The U.S. economy has been in an expansionary phase since the end of the Great Recession in 2009, but the bank believes that this could change in 2024.
The bank believes that the combination of rising inflation, higher interest rates, and a potential shift in the political landscape could lead to a shift in the economic cycle. This could lead to increased volatility in the stock market, as investors adjust to the changing economic environment.
Political Uncertainty
The final potential risk that could lead to increased volatility in 2024 is the potential for a change in the political landscape. The U.S. is currently in the midst of a presidential election cycle, and the outcome of the election could have a significant impact on the stock market.
The bank believes that the combination of a potential change in the political landscape and the potential for a shift in the economic cycle could lead to increased volatility in the stock market. This could lead to increased volatility in the stock market, as investors adjust to the changing economic environment.
Conclusion
JPMorgan Chase & Co. is predicting that the combination of rising risks and the potential for a shift in the economic cycle could lead to increased volatility in the stock market in 2024. The bank identified a number of potential risks that could lead to increased volatility, including the potential for a rise in inflation, a shift in the economic cycle, and the potential for a change in the political landscape. As investors adjust to the changing economic environment, the stock market could become more volatile in 2024.