Thoughtful Money: 2024 “Going To Be A Lot Worse” For Markets as Tech Stocks Implode

2023 has been a strong year for the stock market. But if you back out the seven largest tech stocks dominating the market, it’s a different story. That market is flat, and was at a loss before the recent rally.

Essentially, large-cap tech stocks are the market. When enough of them go down, no matter what reason, the markets will drop too.

And given the strong performance this year and high valuation, 2024 may mark a down year.

While the market is cheering slowing inflation, the labor market is starting to show some cracks. Unemployment is trending higher. That could quickly escalate and spiral higher.

And the impacts of higher interest rates haven’t been fully felt throughout the economy yet.

For instance, homeowners are generally staying put rather than buying a new home. Why? Because it means getting a much higher mortgage rate. That can only be avoided for so long.

Many borrowers with car payments are starting to see prices in excess of $1,000 per month. That’s not a sustainable trend either. The money spent on interest is money that isn’t being spent elsewhere in the economy.

In short, many trends are starting to show the early stages of a reversal. If that happens and stocks start to sell off, tech stocks will see a large percentage pullback. And that will drag the overall market lower.

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