The US stock market could face turbulence and potentially decline by 20% within the first quarter of 2024. Nigel Green, the CEO of deVere Group, one of the world’s largest independent financial advisory and asset management firms, provided a stark warning and advised investors to be prepared for a US market dip that could erase nearly 20% from stocks.
Green noted that there’s a possibility of a 20% drop in Q1 of 2024 that could make the markets enter a gloomy territory. The CEO’s cautionary remarks come at a time when the US markets did not put its best foot forward at the start of January. The turbulent beginning made way for industry insiders to remain ready and brace for an upcoming crash.
A 20% US Market Crash Remains on the Horizon
Expressing concern over the potential US stock market dip, Green shared his uneasiness about the volatility. “Global markets have been spooked since the start of 2024. There’s little sign that volatility will be reduced any time soon amid uncertainty regarding central bank rate cuts,” he said.
He stressed that the US market could decline by 10% but would limit itself and find resistance near 20%. The steep fall could trigger large sell-offs that could impact not only the US but the global markets.
“Corrections help markets maintain a balance by preventing excessive speculation and unsustainable price increases. They provide an opportunity for overvalued assets to readjust to more reasonable levels,” he said.
The CEO explained that the lack of clarity about interest rate cuts will also add to the volatility. “With the ongoing lack of clarity from major central banks, including the Fed, we would not be surprised to see markets falling into correction territory this quarter. As such, investors should buckle up for more turbulence,” warned Green.