According to Morgan Stanley's Mike Wilson, there are three possible growth scenarios in 2024 - and a game plan for each.

According to Morgan Stanley's Mike Wilson, there are three possible growth scenarios in 2024 - and a game plan for each.

According to a report by www.businessinsider.de,

There are three ways the economy can perform in 2024, according to Morgan Stanley Chief Investment Officer Mike Wilson. He created a stock market playbook for each of them. “The probability distribution for these outcomes is balanced, but each has different implications for investments,” Mike Wilson wrote in a note on Monday.

This is how the stock market develops in soft landing scenarios and recessions

One scenario is a soft landing with weak growth, meaning investors should study individual stocks rather than broader market trends. Defensive sectors (like utilities) and cyclicals would perform better in this scenario, as would less volatile stocks like large caps. Another possible outcome is a soft landing with a re-acceleration of the economy. This is the bull case, Wilson said, and has become more likely after the Fed meeting in December. In this universe, small caps have their chance. Cyclicals and economically sensitive industries (e.g. restaurants and leisure) would also do well.

And then there is the more threatening prospect: a recession. “Our economists estimate a 30% chance of a hard landing over the next 12 months, broadly in line with buyer expectations from our dialogue,” Wilson said.

A possible small trigger that can be felt in the market is uncertainty regarding future economic developments. Investors may then tend to move away from riskier investments such as stocks and into safer investments such as bonds. This could lead to a decline in stock prices and affect the market value of many companies.

The coming months could therefore be characterized by great uncertainty as investors try to assess the possible future scenarios and position themselves strategically. The market's reaction depends heavily on which of the three scenarios appears most likely and how the Fed responds to it.

It remains to be seen how the situation will develop and whether the scenarios mentioned will actually occur.

Disclaimer: Stocks and other investments generally involve risk. A total loss of the capital invested cannot be ruled out. The articles, data and forecasts published are not a solicitation to buy or sell securities or rights. They also do not replace professional advice.