Why You Shouldn't Panic if the Market Takes a Breather

In today's Masters Series, adapted from the January 12 and February 20 issues of the Chaikin PowerFeed daily e-letter, Marc explains why today's economic outlook is a positive sign for stocks in the long term... details how the upcoming presidential election is a huge boon for the economy... and reveals how investors should navigate this volatile market in order to capitalize on this unique setup... [Stansberry Research Logo] Delivering World-Class Financial Research Since 1999 [Stansberry Master Series] Editor's note: [Stocks are entering a new cycle](... A cloud of uncertainty is looming over the market – and investors are panicking. But Marc Chaikin – founder of our corporate affiliate Chaikin Analytics – says things aren't as bad as they seem. He believes this market chaos is setting the stage for a slew of buying opportunities in the second half of 2024... That's why Marc stresses investors must navigate today's murky waters with extreme patience in order to reap the benefits of this choppy market. In today's Masters Series, adapted from the January 12 and February 20 issues of the Chaikin PowerFeed daily e-letter, Marc explains why today's economic outlook is a positive sign for stocks in the long term... details how the upcoming presidential election is a huge boon for the economy... and reveals how investors should navigate this volatile market in order to capitalize on this unique setup... --------------------------------------------------------------- Why You Shouldn't Panic if the Market Takes a Breather By Marc Chaikin, founder, Chaikin Analytics For the first time ever, the S&P 500 Index closed above 5,000 earlier this month... Meanwhile, the U.S. economy is surprisingly strong... The American consumer and the knock-on effects of the artificial-intelligence ("AI") boom are a big reason for that strength. And it's pushing many large-cap stocks to new highs. We can see the enhanced productivity through rising profit margins. And in turn, companies are reporting earnings surprises and generally positive forward guidance this quarter. In the end, as I've stressed previously, everything matches up with the price action of stocks in prior presidential-election years. That's great news for the year ahead. So, the reality is that I'm not worried about a bit of a pullback in the short term. In fact... I'm looking forward to it. --------------------------------------------------------------- Recommended Links: [Wall Street Titan Warns of a Super Tuesday Stock Market Surprise]( On February 29, he's stepping forward to warn of a critical election-year event with a 90% chance of hitting U.S. stocks in the days around Super Tuesday. Get the full story (and two free recommendations) [right here](. --------------------------------------------------------------- ['D.C. Elites Just Created the Financial Opportunity of a Lifetime... by ACCIDENT']( BREAKING: Stansberry's most controversial analyst just issued an urgent update: "This straightforward opportunity for FINANCIAL REVENGE on the government could jump as much as 900%..." [Click here to watch this free video](. --------------------------------------------------------------- Hopes of interest-rate cuts sooner rather than later – along with other factors – have propelled stocks higher over the first six weeks of 2024. And the mainstream financial media led some market participants into unrealistic expectations of five to seven interest-rate cuts this year. The prevailing narrative was that these cuts could start as soon as next month. Well, the market just got a reality check. A few weeks ago, the U.S. Bureau of Labor Statistics released the January update of the Consumer Price Index ("CPI"). It showed an unexpected (but minor) uptick in the core inflation rate. Notably, it dashed hopes of an imminent rate cut. That means an early rate cut is effectively off the table now. A more realistic scenario is three to four rate cuts starting in the second half of the year. Now, the market will need to process this "later than hoped for" rate-cut timeline. That could play out in the days and weeks ahead. But when the dust settles, it means one thing... We're likely going to get another great entry point into this market. You see, lower interest rates and a resilient domestic economy means we'll likely see a resurgence in small-cap stocks. And I also expect the strength of the S&P 500 to broaden out into the other 493 stocks beyond the so-called "Magnificent Seven" tech mega caps. That doesn't mean tech stocks will suffer, though. I still expect big things from this space as demand for AI chips and software keeps growing... Based on the Technology Select Sector SPDR Fund (XLK), tech stocks surged more than 50% in 2023. It was a massive climb. Since 1990, this sector has surged more than 40% in a single year seven times. According to data from Bespoke Investment Group, tech stocks continued to rally the following year in six of those seven instances. And they produced an average gain of nearly 22%. That points to even more possible upside ahead for tech stocks. And remember, another potential driver for stocks in general is that 2024 is a presidential-election year... Since 1950, the S&P 500 has rallied in 14 of 18 presidential-election years. The strength was concentrated in the back half of the year, too. It was up from the end of May through year-end in 16 of those 18 years – with an average gain of 10% over that six-month period. Why is the market so strong in presidential-election years? Well, it comes back to the power of the president to pump up the economy and make voters feel good in November. And 2024 shouldn't disappoint on that front... Interest rates and inflation are still down significantly from their highs. Meanwhile, wages are still on the rise. And consumer sentiment is already on the upswing. And a less visible but equally as important factor is the end of the Fed's quantitative-tightening efforts – those policies designed to reduce its balance sheet. The January meeting minutes showed that the Fed is still wary about the risks of cutting rates too soon. So with the Fed unlikely to consider approving rate cuts until June, it's crucial for investors to remain patient as we navigate the first half of 2024. In other words, the next three to four months are historically the most challenging period in a presidential-election year. And this year will be no exception... I expect to see volatile and choppy price activity until we get closer to the Democrats' and Republicans' national nominating conventions. They'll both happen later this summer. Don't let any brief profit-taking scare you. Keep your eye on the ball and stay "bullish"... I certainly still am for 2024. Good investing, Marc Chaikin --------------------------------------------------------------- Editor's note: Marc predicted the 2020 and 2022 crashes, 2021 bull run, and last year's historic banking crisis. And he recently stepped forward to sound the alarm about what's coming next for stocks throughout this election year... Marc hosted an online presentation last week to reveal the one move you must make before Super Tuesday primaries in order to protect your wealth. Plus, he shared the name of the No. 1 stock you should buy ahead of the presidential election. [Learn more here](... You have received this e-mail as part of your subscription to Stansberry Digest. If you no longer want to receive e-mails from Stansberry Digest [click here](. Published by Stansberry Research. You’re receiving this e-mail at {EMAIL}. Stansberry Research welcomes comments or suggestions at feedback@stansberryresearch.com. This address is for feedback only. 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