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Ryan Detrick, former LPL market strategist

Portfolio > Economy & Markets

Carson’s Detrick Remains Bullish Into 2024: 3 Reasons Why

By Dinah Wisenberg Brin

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Ryan Detrick, Carson Group’s chief market strategist, sees the stock market rallying through year’s end and continuing its bullish run well into 2024. He cites an economy that’s on firm footing.

“Sure, things are ‘slowing down’ some, but we like to say they are normalizing, not slowing down. Could we really keep growing at 400k jobs a month like last year? No, but a steady 150k to 200k is perfectly normal and in line with pre-COVID trends,” he wrote in a column posted on the firm’s blog Thursday.

“The consumer remains strong and incomes are growing at a very healthy clip as well. If we can avoid a recession next year — our base case — then we think the chances of a year with potential low double digits returns is quite likely,” Detrick said.

Carson Group expects a year-end rally and believes that stocks probably will reach all-time highs in 2024’s first half. The following are three reasons for Detrick’s bullishness.

Strong Earnings

“We’ve seen analysts continue to come in way too low on estimates and this trend likely continues. The third quarter was expected to see earnings fall slightly, now S&P 500 earnings are expected to come in up close to 6%,” Detrick wrote.

“Looking ahead, companies in the S&P 500 now expect to see record profits over the next 12 months. You know what tends to happen when profits are at a record? Stocks tend to follow, something we expect to see in 2024.”

Profit margin expectations are increasing as well, despite talk for a year that they’re too high and must fall, Detrick wrote. “If both profits and profit margins are increasing next year, that should be a nice tailwind for equities.”

Election Timing

Historically, pre-election years tend to see strong equity returns, especially when a first-term president is in office, “which has played out nicely once again in 2023,” Detrick noted.

Under a first-term president, the returns generally are weak early, especially during a midterm year, then improve significantly in the pre-election and election year, he added.

“Well, so far things have played out quite well with a very weak midterm year and solid pre-election year. Why is this? It could be as simple as when a president is up for re-election there are certain levers they can pull to get the economy and thus stocks into a better mood.”

Two of three years this century when lame-duck presidents sat in the White House, 2000 and 2008, “were horrible years for stocks,” Detrick noted.

Stocks have been higher during an election year of a new president for the past 10 presidents, he added. “Higher the past 10 times and up 12.2% on average isn’t anything to ignore and that is inline with a potential low double-digit return in 2024.”

Rare Market Signal

The market last week experienced a bullish signal called the Zweig Breadth Thrust, which Yahoo Finance calls a rare but historically reliable technical indicator to gauge stock market strength.

This indicator involves significant increases in both the number of stocks rising in the New York Stock Exchange and in the 10-day exponential moving average of the number of advancing stocks, according to Yahoo, which reported the surge in market breadth signals a major boost in buying interest.

The bottom line, Detrick wrote, is that “this happens when stocks go from very oversold to very overbought in a quick fashion. Think of it like a washout and then buyers step in big time. Again, this is rare, with the previous 16 times it had happened — back to WWII — that had a year of data after the signal showed higher prices every single time.”

Pictured: Ryan Detrick

Dinah Wisenberg Brin

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