The economic landscape in 2024 is pretty challenging, with consumer sentiment recently hitting a seven-month low. Morgan Stanley's Mike Wilson says the unusually wide gap between current economic conditions and future expectations is what's really notable - and the analyst says the gulf in this metric suggests that "we are dealing with an unbalanced economy of 'haves' and 'have nots,'" according to a recent note.
Even though inflation is cooling down, high prices are still a buzzkill for consumers, dampening their expectations for real income gains over the next five years. This strain is also visible in the stock market, where the narrow breadth and underperformance of small-cap stocks are a point of concern for many. The S&P 500 Index ($SPX) has gained 14.7% so far this year, but the equal-weighted version of the index is up just 4.4%, and the Russell 2000 Index (RUT) is slightly negative on the year.
