5 Things to Look for in Stocks in 2024

The key is how much of that is already baked into share prices, especially with expectations for a soft landing building.

As Louis Navellier of Navellier & Associates sees it, six of the seven stocks are looking good heading into 2024. Only Apple will be sitting on the sidelines absent a cutting-edge product — or technology — to boost its bottom-line, he wrote in a report.

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3. Presidential Vote

An election year with a sitting president running is historically a bullish scenario for US stocks. Since 1949, the S&P 500 is averaging a gain of nearly 13% in those election years, per the Stock Trader’s Almanac. When there’s an open field without an incumbent president, the index averages a 1.5% loss for the year.

Source: The Stock Trader’s Almanac

Part of the reason for equity gains is incumbents typically implement new policies or push for lower taxes to boost the economy and sentiment ahead of the vote.

4. Asia Risk: BoJ, China and India Elections

While the Nikkei 225 Stock Average climbed to a three-decade high in 2023 on the back of the Bank of Japan’s ultra-loose policy and a weak yen, Japanese shares face a hurdle in early 2024. The central bank is maintaining the world’s last negative rate, but two-thirds of economists forecast it will deliver its first rate hike since 2007 by April.

Meanwhile, after another disappointing year for China bulls, investors will watch meetings of the National People’s Congress and the third plenum for Beijing’s growth target in 2024 and clues on fiscal stimulus.

India is a big bullish bright spot, as the nation bags high-profile manufacturing contracts, ramps up infrastructure spending and emerges as an alternative to China.

5. ECB, BOE Policy

With the Stoxx Europe 600 Index near its highest level in two years, cyclical shares that are heavily exposed to Asia may hold the key to further gains given China’s potential fiscal boost.

While a soft economy will likely weigh on European earnings, analysts’ consensus estimates are for roughly 4% profit growth in 2024, mostly relying on rising margins, BI data show.

Bond markets expect the European Central Bank to cut rates by April, which could provide an additional boost to the region’s shares.

The Bank of England is expected to trail both the Fed and ECB in easing since the UK has one of the highest inflation rates among Group of Seven nations.