The Dow is expected to move higher in 2023 as macroeconomic factors shift. 30 blue-chip firms that are leaders in their respective industries make up the Dow Jones Industrial Average (DJIA) and broadly represent American industry. Thus, they generally perform well in all markets as the American economy is still the largest globally even in difficult times.
Dow Jones stocks are particularly interesting as we head into 2024. The markets expect rate cuts to begin sometime in early to mid 2024. Those cuts will galvanize an upswing. Cheaper lending will spur growth across the economy and will propel the Dow higher. That said, certain stocks within the index will perform better.
Boeing (BA)
The worst appears to be behind Boeing (NYSE:BA) which is why it leads off this recommendation of Dow stocks to buy before 2024. The airplane manufacturer suffered a series of fatal crashes in 2019 that grounded its 737 MAX airplanes.
The years subsequent to that grounding have been equally difficult. The company has faced delays and setbacks and getting its airplanes it recertified for airworthiness. Those difficulties appear to be drawing to a close which is why Boeing again makes sense for investors. It is likely that Boeing will begin deliveries of its 737 Max 10 jet early next year. The MAX 10 is Boeing’s largest single aisle airplane and is set to be delivered to several major carriers including United Airlines (NASDAQ:UAL), RyanAir, and Air India among others.
It’s also likely that other carriers could increase their orders for Boeing’s jets as rate cuts hit. Cheaper lending means cheaper financing making the pursuit of greater revenue generating Investments that much more appealing.
Walmart (WMT)
Walmart (NYSE:WMT) is, in a lot of ways, very analogous to the U.S. economy overall. The stock and the company’s performance serve as a bellwether for the macroeconomy. With Walmart performing very well currently and things looking brighter in 2024, now is the time to consider investing.
U.S. GDP increased by 4.9% in the third quarter. Walmart’s revenues grew by 5.2% during the same period.
So, 2024 promises to be a strong year for Walmart because the macroeconomic outlook is brightening. Of course, the primary fuel for that optimism is the expectation of rate cuts at some point in 2024. Walmart intimated as much when it released earnings just a week ago. Management raised guidance for sales and adjusted EPS for the fiscal year. The company continues to telegraph the idea of increasing strength to the stock market as we headed toward 2024.
Beyond its current strength, investors should also consider that Walmart continues to make strides to close the gap between itself and Amazon in terms of e-commerce. The firm’s e-commerce sales grew by 15% during the third quarter.
Microsoft (MSFT)
Microsoft (NASDAQ:MSFT) continues to put itself in the best position. Here I’m referring to the ongoing saga between the company and OpenAI.
Microsoft invested heavily into OpenAI for its generative AI prowess. Early in 2023 that turned out to be a very shrewd investment as the sector took off. It served to place Microsoft ahead of other Silicon Valley firms in terms of AI positioning. In late 2023, OpenAI suffered a coup. The board, led by chief scientist Ilya Sutskever, deposed CEO Sam Altman — leading to an employee revolt. Sutskever has since had to recant and has asked Altman to return to the firm. Meanwhile, Microsoft is going to win no matter the outcome.
The company has promised to take on Altman and any of the hundreds of employees that threatened to quit if Altman was not reinstated as OpenAI’s CEO. That would be a big win for Microsoft if it were to happen. The company would suddenly have on boarded one of the leading AI firms rather than simply being a leading investor. Conversely, if Altman is reinstated as chief of OpenAI Microsoft won’t have lost anything.
Investors should expect that Microsoft will continue to thrive in 2024. The company has positioned itself extraordinarily well in regards to artificial intelligence. Its Azure cloud investment is doing well, its co-pilot AI product is positioned to continue to improve workplace efficiency, and on and on.
Intel (INTC)
The overarching narrative around Intel (NASDAQ:INTC) and its stock is that it’s an ‘also ran’ at this point.
Nvidia (NASDAQ:NVDA) continues to lead and dominate the market for artificial intelligence chips. Intel is among many firms that are attempting to dethrone Nvidia piece by piece.
For several months headlines have quietly spoken to the idea that Intel imposes a quiet threat to Nvidia in that regard. Intel’s Gaudi2 chips were pitted in a head-to-head battle against Nvidia’s h100 chips in a series of AI tests. Nvidia’s chips prevailed in each of the tests. However, Intel’s chips did manage to complete the tasks.
It’s clear that Intel remains behind Nvidia overall. There’s no debating that fact. However, also consider that Intel is currently best positioned to receive billions in government funding for chip production facilities. The U.S. government continues to worry that China could invade Taiwan and is actively searching to move production on shore. In other words, Intel is positioned to have the strategic advantage of U.S. military might on its side for quite some time into the future.
Apple (AAPL)
Apple (NASDAQ:AAPL) can be characterized as a writhing giant. The company continues to deal with multiple factors which conspire to make its stock difficult to pin down. That has resulted in many analysts and pundits growing sour on it overall. This was particularly true when the company released results for its fiscal fourth quarter in recent weeks.
While earnings topped estimates for the period, the company also gave guidance for the remaining quarter in the calendar year that disappointed. The company projected that sales would be flat for the December quarter. While the news caused shares to drop immediately it essentially does not matter moving forward.
There’s a very simple but compelling argument to be made in favor of Apple in 2024. Consumers, who have shunned purchases of expensive iPhones to some degree in 2023, could have renewed confidence in 2024. The economy is very likely to strengthen and that will lead to rising consumer confidence and iPhone sales.
American Express (AXP)
Investors simply need to look at the most recent earnings report from American Express (NYSE:AXP) to understand why investing in the stock makes sense.
Those numbers tell a great story about how financially healthy the wealthier users of its products continue to be. American Express recorded its sixth consecutive quarter of record revenue. Sales grew 13% to $15.38 billion during the period.
American consumers of all income levels continue to rack up credit card charges. Thus, it’s reasonable to consider investing in the other major credit card stocks including Visa (NYSE:V).
It’s arguably even more logical to invest in American Express exactly because its users tend to be more fiscally responsible. That said, the company did increase its provisions for credit losses substantially during the period.
Even so, eat earnings per share increased by 34% as net income rose by 30%. Investors should expect American Express to continue to thrive in 2024 as the brightening economic outlook will only serve to increase credit card spending.
Salesforce (CRM)
Salesforce (NYSE:CRM) is, by far, the largest customer relationship management firm. Thus, the stock is very well positioned to thrive moving into 2024. Enterprise demand for generative AI services and products is going to continue to thrive.
Salesforce has invested heavily in partnering and collaborating to improve its generative AI offerings. The company is already extremely well integrated at the enterprise level as a majority of firms use Salesforce as their CRM.
Those firms must continue to invest in generative AI, especially in the realm of customer relationship management. The insights that AI promises to provide regarding customers is essentially invaluable. Salesforce is collaborating with Microsoft , Google (NASDAQ:GOOG,GOOGL), and other tech firms to bring solutions to customers.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
