Line chart showing quarter-over-quarter real GDP growth from Q3 2017 through Q3 2023 as well as Wells Fargo Securities estimates for real GDP growth through Q3 2024. GDP growth has come down from high levels in late 2020 and has recovered from Q1 2022 lows. GDP grew robustly in Q4 2023 and is expected to decline through Q3 2024.
Sources: Bloomberg, Wells Fargo Securities, and Wells Fargo Investment Institute. Quarterly data from July 1, 2017 to September 30, 2023. Q4 2023 – Q3 2024 are Wells Fargo Securities forecasts, as of December 14, 2023. Forecasts are not guaranteed and are subject to change. GDP = gross domestic product. QOQ = quarter over quarter. SAAR = seasonally adjusted annual rate. Forecasts are based on certain assumptions and on views of market and economic conditions which are subject to change.
Key Takeaways
- Elevated interest rates, and possible tighter liquidity conditions could lay the groundwork for a deepening economic slowdown, in our view.
- We expect slowing economic and profits growth, combined with higher interest expenses tied to higher financing costs, to create headwinds for further stock gains by early 2024.