Lee Clifford

Finance Editor

So writes Fortune senior correspondent Shawn Tully in a new piece examining the forces that may exert control of the markets and economy heading into 2024. Speaking with Jim Masturzo, chief investment officer at Research Affiliates, a firm that oversees strategies for over $130 billion in mutual funds and ETFs for the likes of Pimco and Charles Schwab, Tully writes about how the year could play out:

“Masturzo concedes that in the short term, ‘The economy could remain buoyant and investors resilient.’ But he believes that the big federal spending and ‘free money’ Fed policy that funded the bash will soon leave a stiff hangover. ‘The macro game of musical chairs cannot go on forever,’ Masturzo writes. It was the regional banking crisis starting in March, he says, that exposed the first cracks. But after a steep selloff, frenzied excitement over the future of AI sent Big Tech soaring once again.”

“Now, Masturzo believes the economy and the markets stand near an historic inflection point that can only temporarily be averted by such probably ephemeral phenomena as the AI craze and the favorable Nov. 14 CPI report that got shares jumping. The exhaustion of the COVID money, the end of student loan forbearance, and the stubbornly rising prices bound to spook consumers will ‘pave the way for an eventual recession,’ and usher in years of austerity.”

This will have profound effects on the markets, too. As Tully writes: “In the new paradigm, the best investment categories of the last decade should prove the worst performers going forward, while the beaten-down, unloved sectors of recent years are likely to thrive.”

You can read the full analysis—including which stocks are likely to thrive in the new era of austerity—here.

Expect subpar returns in a new ‘age of austerity,’ says a top analyst at Research Affiliates

AI

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Murati was named OpenAI’s interim CEO Friday after Sam Altman was ousted by the board.

FINANCE

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HOUSING

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The largest generation in American history is entering prime home-buying age against a chronic shortage of housing supply.

Lower inflation may be the hammer that cracks the unaffordable housing market for would-be homebuyers 

Home shoppers may benefit from stabilizing consumer prices and cheaper mortgages if the Fed cuts interest rates.

SUCCESS

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TECH

Former Googler Adrian Aoun raises $100 million for walk-in AI healthcare pods

Your next visit to the doctor’s office might take place inside a shiny eight-foot-by-eight-foot cube without anyone else there.

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WELL

Chelsea Clinton is betting on a health care startup to help solve the nation’s caregiving crisis

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LEADERSHIP

‘The Marvels’ flop shows that Kevin Feige’s ‘brilliance,’ which drove $29B for Marvel, is no match for Disney’s insatiable need for content

The dismal opening weekend of The Marvels highlights that the Marvel movie studio is facing a box office problem for the first time in its history.

Linda Yaccarino scrambles to clean up Elon Musk’s mess after the X owner once again drives her advertisers away

The ad executive-turned-CEO wasted no time reassuring advertisers that X has made “efforts to combat antisemitism and discrimination.”

Every week, learn how the CEOs of Europe’s largest companies are navigating the trends and news impacting business in the region. CEO Weekly Europe debuts Nov. 29.

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