2024 Market Projections: Wall Street Bank Anticipates Dip-Buying Bonanza for Investors
In the near future, we can expect to witness how Nvidia’s financial performance affects the market, as historical evidence suggests that these numbers have influenced bond yields and the S&P 500.
Many investors and even Wall Street strategists may have inaccurately anticipated an economic decline this year, only to be proven wrong when it did not happen. This is particularly relevant regarding the end-of-year predictions made for the S&P 500.
Société Générale is unique compared to other banks because the S&P is currently 4% lower than their target of 4,750, which they aim to reach by 2024.
Forecasters from Swiss banks predict a promising year ahead and suggest getting ready to exploit a decline in the market as the S&P 500 is anticipated to hit its lowest level in this current cycle. They expect the Federal Reserve to implement approximately 150 basis points of interest rate reductions, a decrease in GDP growth, and improved comprehension of the political cycle by the conclusion of 2024. This insight is provided by analysts Manish Kabra and Charles de Boissezon.
In order to prepare for the year 2024, they outline their plan by dividing it into four separate quarters.
A2) The value of the S&P 500 has risen as bond yields have declined. Moreover, the global economy is getting better, and the index is experiencing more positive earnings than in the previous year.
The period that poses the greatest difficulty is marked by a clear decrease in consumer engagement and the mounting uncertainty in politics.
The third quarter has presented difficulties because earnings have decreased and there is a growing sense of uncertainty in the political sphere, despite substantial cuts made by the Federal Reserve. In order to improve the S&P 500 index, it will be necessary to see gains across various sectors, as comparing earnings for the Nasdaq-100 has become more challenging. However, these gains are not anticipated to happen right away.
After the U.S. elections conclude, reshoring stocks have a benefit, and the market breadth starts displaying indications of enhancement as focus moves towards strong economic expansion.
What is the investor’s plan for this particular scenario? They offer four forecasts for the performance of U.S. stocks in the upcoming year.
Buy the dip in the S&P 500. The emergence of improved indicators for profit potential will present opportunities for purchasing, even though there will be difficulties in the upcoming year. A mild economic downturn is predicted for the middle of 2024, followed by a sell-off in the credit market in the second quarter, and a continued decrease in quantitative easing measures.
Investors looking to diversify their portfolio and seek exposure to big-cap growth and earnings momentum may consider the long equal-weighted version of the Nasdaq-100 compared to the Russell 2000. SocGen remains cautious despite the recent surge in small-cap stocks due to the high number of companies refinancing and facing losses. The First Trust Nasdaq-100 Equal Weighted Index Fund tracks this particular index.
The reestablishment of U.S. stocks has seen a notable rise. Since the implementation of the Inflation Reduction Act, the market has experienced an influx of over $500 billion in new investments. Stocks related to reshoring have particularly thrived in the industrial sector, unaffected by the changing administrations of both Trump and Biden. Two notable options for investors in this category are the Transform Supply Chain and ProShares Supply Chain Logistics. Furthermore, there are various other American Revival stocks that center around this concept and could be worth considering for investment purposes.
Societe Generale anticipates a substantial increase in the worldwide generative AI market, projecting a compound annual growth rate of 31.4% between 2023 and 2032. Nvidia’s remarkable success this year, seeing a rise of around 244%, has highlighted the importance of AI among investors. For those looking to invest in this field, possible choices are Cathie Wood’s ARK Autonomous Technology & Robotics ETF and the iShares Robotics and Artificial Intelligence Multisector ETF.