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Seven business days into the new year, stocks are already charting a markedly different path than they were a year ago. Despite a defensive start to 2024, at least one Wall Street strategist has high hopes for the year ahead of what could be a somewhat bumpy first quarter.
Mark Newton, Fundstrat Managing Director and Global Head of Technology Strategy, appeared on Yahoo Finance Live on Wednesday and detailed his expectations for 2024.
“I think 2024 has started out differently than previous years, with the former leaders of the past year now lagging behind,” he said. As for the outlook for investors this year, Newton said, “It’s going to be easier to make money.” “Our goal at the end of the year is about a 10% upside,” he said, referring to the S&P 500’s 5,175 level.
2023 ended as a bumper year, but early signs of strength were clouded by recession predictions and an ultra-hawkish Federal Reserve. A year ago, Santa Claus visited investors during the Christmas and New Year holidays, promising a green end to the year. But most of the stock market failed to deliver the bullish returns until the much-needed “everything goes up” in the last two months.
2024 will be a year of contrasts. Healthcare is the leading sector with his 3.3% rise, while defensive sectors such as utilities and consumer staples also dominate the leaderboard. This time last year, the medical industry was in the red as the Magnificent Seven geared up for his unexpected second-quarter domination.
St. Nick left a lump of coal this season, an early sign of potential trouble for the rest of the year. Also, from a seasonality perspective, election years like 2024 don’t tend to be as bullish as his third year of the presidential cycle, but they’re still bullish.
Nodding to headwinds earlier this year, Newton said: “I think the first quarter will be volatile, but people are still very negative. We’ve had two wars and inflation and this is an election year. We should be concerned. There are a lot of things.” . ”
Newton looks at cycle work, seasonality trends and the distribution of returns across the market, with February and March being particularly vulnerable.
“Any decline until the end [first] “Given the range of medium-term bullishness, this quarter could present an opportunity for investors,” he wrote in a Fundstrat investor note.
In fact, if negative sentiment is not reflected in price, it can be a powerful bullish force. So “making money easier” might just mean getting your stomach strong and doing some good old-fashioned bargain-hunting.
After a year dominated by technology, Newton continues to favor the information technology sector this year, along with industrials and energy. The energy sector was by far the best-performing sector during the 2022 bear market, but it was one of the few sectors to be in the red at the end of 2023.
“I think industrials is one of the top areas for investors to consider,” Newton said, noting that the sector has risen to 20-year highs.
In this area, he likes Boeing.
“I think there’s a lot of bad news in the name,” he said, adding, “Normally this is a time when you’d want to avoid that news and buy into the upside.”
For dip-minded investors, Apple also beckons, Newton said.
“In my opinion, Apple isn’t seeing any technical deterioration, it’s just a prolonged short-term downturn,” he said. “But in the big picture, stocks are still in very good shape. I think the bad news has gotten a little ahead of itself.”
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