2024 Year of the AI Dragon
Get Your Financial Shields Out
The year of the Dragon is 2024. Huffing and puffing, dragons fly through the air and spit fire. From an investors point of view, this is seen in the financial markets with constant economic and global turmoil almost daily. A famous quote from Edgar Allen Poe, “Who entereith herein, conqueror hath bin; Who slayeth the dragon, the shield he shall win.” Get your financial shield out!
With record interest rate increases in 2023 and bank failures, the Fed is looking to pivot in 2024 and potentially decrease rates. As noted in the pic below with the red flat line. This can potentially lead to a bond rally.
Will 2024 be a year of deflation or worse, stagflation? With mixed numbers from government agencies such at BLS showing unemployment at a minimal 4.9% in California1 and tech layoffs2 such as Google 30,000 layoffs3, what is the true health of the job economy? Shadow Stats has a comparison.4
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Almost 50% of the total US Federal spending budget5 is Medicare, Defense, and Social Security. Plan for increases in all of these areas. California recently announced free health care to undocumented people in the US for 20246. A portion of this health care will be Medicare. So, California will increase taxes and kick off existing Medicaid beneficiaries for these new Medicare/Medicaid beneficiaries7. Medicaid is paid by the state, but a larger portion of Medicaid is paid by the Federal government8. This is very important because Medicare/Medicaid pays a higher dollar amount than regular health insurance to carriers. We see this with Humana leaving Group Health plans and focusing on high profit margin Medicare9. A good old fashion war? Need to explain anymore… What president will touch Social Security benefits? Plan for higher taxes.
2023 looks like it’s just a start of what’s to come. With many moving parts described, 2024 will be the year of AI Dragon. We will see the power of AI in action with many opportunities and pitfalls. Get your financial shield out and be prepared. Our financial advisors at Treveri Capital are here to help navigate your financial future.