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Tuesday, January 9; Sheraton Grand Chicago Riverwalk

Speakers (in order of presentation):

  • Diane Swonk; Chief Economist, KPMG 
  • John W. Rogers, Jr.; Chairman & Co-CEO, Ariel Investments
  • Dr. Bob Froehlich; Owner, Kane County Cougars Baseball Club & Former Vice Chairman, Deutsche Asset Management

Terry Savage; Nationally Syndicated Columnist, Terry Savage Productions 


It’s been said that life’s only constant is change, and the same can be said for our economy. In the past 12 months alone, several new forces emerged, including the explosion of Artificial Intelligence and the rising popularity of life-changing weight loss drugs Ozempic and Wegovy. At last year’s Economic Outlook Event, the big question was “Will there be a recession in 2023?”. Unbelievably to some, not only did the recession never come, but the year ended with the stock market bumping up against all-time highs despite two threatening wars and continued political dysfunction. 

Reflecting on the past four and a half decades (as this year marked the 44th Annual Economic Outlook Event), Terry Savage declared that Warren Buffet was right. Despite all the ups and downs of the stock market and the economy, despite recessions and inflationary periods, financial crises, and politicians’ insanity—no one ever got rich betting against America. 

And speaking of bets, this year’s event was once again packed with attendees eager to hear what our three expert forecasters are betting on in 2024. 

Diane Swonk:
First to the podium was beloved event veteran Diane Swonk, who set the tone for her forecast with a Voltaire quote: “Doubt is not pleasant, but certainty is absurd.” The quote resonated as she watched financial markets rally with confidence on expectations of aggressive rate cuts. “I understand the optimism,” Swonk stated. “But I don’t understand blind faith.” 

Reflecting on how our economy beat the odds last year, Swonk pointed out that 3 sectors have dominated employment gains for the last 6 months—healthcare, leisure & hospitality (thanks Taylor Swift!), and government at the state and local level. However, the higher concentration of employment in those 3 sectors has also made us more susceptible to external shocks—something that was on full display at the height of the UAW and actors’ strike. 

Looking ahead, Swonk is forecasting a soft landing in 2024, emphasizing that a soft landing is not the same as no landing. She predicts growth will slow to 1.3% on a Q4-to-Q4 basis, and profit margins will be squeezed as higher rates erode profits and consumers push back against price hikes. 

Swonk also believes that investment will be hit harder than consumer spending, hiring plans will be scaled back, and unemployment will rise as job openings slow. She also acknowledged the upcoming election, explaining that policy uncertainty will act as a tax on the economy. 

Lastly, Swonk noted the Fed itself is more uncertain about its outlook than financial markets. What she found especially encouraging is that when pushed about the risk that the Fed would hold on too long and trigger a recession, Chairman Jay Powell pushed back. In a complete 180 from the year prior, Powell stated that the Fed is focused on not making that mistake. “That is hopeful,” Swonk said. “Their doubt is hopeful. Their uncertainty I lean into.”

John W. Rogers, Jr.:
Next to the podium was highly respected investment authority John W. Rogers, Jr. For decades, Rogers has been a believer in small and mid-cap value stocks, and this year, he’s doubling down, pointing out that large-cap growth stocks are very expensive on a historical basis. 

Although he noted our capitalist democracy is the best system ever invented, he also acknowledged this extraordinary time in our country’s history—one marked by fear and divisiveness, international tension, political distrust, and the worry that we could become an isolationist country unable to grow the way we dreamed. 

Looking forward, Rogers encourages a long-term approach to investing, and outlined why it’s the opportune time for small-value vs. large-cap growth stocks. Rogers began by reminding the room that the Magnificent 7 (Apple, Microsoft, Amazon, Alphabet, Nvidia, Meta, and Tesla) drove the market’s performance in 2023, going up 87%. However, when you look at the data, he shared that the 20-year average PE for large-cap growth stocks is 18.9x earnings vs. 26.5x today. At the same time, the 20-year average PE for small-cap value stocks is 16.7x earnings vs. 16.3x today. The last time the valuation gap was this large was during the 1990 dot com era. Rogers noted, “You can all remember how that ended.” Rogers feels the similarities are clear. The internet stocks that were booming decades ago came to a very difficult end when the bubble finally burst, and he believes the same implosion will happen with today’s AI stocks.

On a positive note, Rogers predicts the neglected and misunderstood small-value stocks are poised to start a sustained comeback in 2024. He forecasts large-cap growth stocks will be down 12-15% this year, while small-value will have an extraordinary rebound and be up over 10%. 

Lastly, Rogers noted that the Fed is really on their game, doing the right things in a systematic way. He is very optimistic that they have the money supply under control and believes that will ultimately cause interest rates to decline. 

Dr. Bob Froehlich:
The event’s final forecast came from the always bold and witty Dr. Bob Froehlich, who believes investors too often focus on achieving short-term gains rather than playing the long game. To help drive smarter long-term investing, Dr. Bob shared 3 investment themes that he believes will be critical moving forward:

  1. Robots/AI – Just as digital technology burst onto the scene and changed the world forever, so too will AI and robotics. Dr. Bob explained that because AI’s growing popularity isn’t going to stop or slow down, it’s time to embrace it not only in your daily life, but also in your investments. Explaining the value of AI to a room of business executives, Dr. Bob joked “It didn’t stay out too late last night, it doesn’t take a lunch break, and it doesn’t ask its supervisor how many days it can work from home next month.”

  2. Water – Water is our most needed resource, yet also one of our most neglected. Although 71% of the earth is covered in water, only 0.5% of that water can be used for human and animal consumption. Factor in population growth, pollution, and climate change, and Dr. Bob explained that water will become increasingly scarce while the work of water resource organizations will become increasingly critical. 

  3. China – When investing, Dr. Bob recommends focusing on where the people are. After all, people create jobs, jobs create economic growth, economic growth attracts investment, and investments move the market. For context on just how populous China is, Dr. Bob pointed out that despite the population of Chicago (2.6 million people) being greater than that of 15 individual states, China has 47 cities with populations greater than Chicago. With China’s bubble having just burst, Dr. Bob believes now may be the single best time to invest there.


  • Diane Swonk predicts:
    • No recession in 2024. 
    • The Dow at 36,900.
    • Interest rates (10-year treasury) at 3.4%.
    • Inflation just over 2%.
    • The unemployment rate at 4.1%.
    • Four rate cuts starting in May. 
    • If Swonk had $100,000 to invest this year, she would give it all to John W. Rogers, Jr. at Ariel Investments.

  • John W. Rogers, Jr. predicts:
    • No recession in 2024, though he may start to worry as we get closer to 2025. 
    • The Dow down 10% this year.
    • Inflation around 2.5%.
    • Interest rates (10-year treasury) at 3%. 
    • Three rate cuts starting this summer. 
    • If Rogers had $100,000 to invest this year, he would put it into Madison Square Garden Entertainment as a long-term investment.

  • Dr. Bob Froehlich predicts:
    • No recession in 2024. 
    • The Dow at 44,000.
    • Interest rates (10-year treasury) at 3.5%.
    • Inflation around 3.3%. 
    • Eight rate cuts starting in Q1. 
    • If Dr. Bob had $100,000 to invest this year, he would put $25k into Robotics/AI, $25k into water resource funds, and $50k into a small-cap China fund.


On behalf of The Executives’ Club of Chicago, we thank you for your continued support of our Economic Outlook program. We hope our experts’ forecasts once again give you a competitive edge as you build out your strategies for the coming year, and we wish you much success in 2024 and beyond!