It’s the end of the year, which means that it’s time to dust off the crystal ball and look at some top stock predictions for 2024. What will the year ahead bring for the stock market and equities? That’s the questions analysts and traders are trying to answer as they close out 2023 and look ahead to 2024.
Opinions on where the market is heading seem to differ widely with both bulls and bears represented in the 2024 forecasts. Some market observers continue to expect a recession in 2024 and a downturn in corporate earnings. Others see bulls stampeding across the market as interest rates and bond yields move lower. Where it all ends up is anyone’s guess. However, we would be remiss if we didn’t offer a few top stock predictions for 2024 of our own. Here are seven bold stock predictions for the year ahead.
Stock Predictions for 2024: Gold Prices Continue To Rise
The price of gold just hit an intraday all-time high of $2,110.80. And there’s word the metal has formed a “golden cross,” a technical chart pattern that has historically proven to be a bullish sign for the commodity. Essentially, the golden cross indicates that the price of bullion is likely to continue rising in the near term.
Demand for the safe-haven asset continues to be strong heading into the new year, with many analysts forecasting that gold’s price will remain above $2,000 throughout 2024. In addition to geopolitical uncertainty, other tailwinds are a weaker U.S. dollar and expectations that interest rates will move lower in the coming year. Also, a recent survey by the World Gold Council found that 24% of central banks intend to increase their gold reserves over the next year.
Bitcoin’s Price Hits An All-Time High
Cryptocurrencies continue to surge higher, with Bitcoin (BTC-USD) leading the charge. At nearly $44,000, the price of BTC has gained 164% in 2023 and is now at its highest level since April 2022. That said, the price of Bitcoin remains well below its all-time high of $68,000 reached in November 2021. That could change in 2024, especially if spot Bitcoin exchange-traded funds (ETFs) are approved by the U.S. Securities and Exchange Commission (SEC) as is widely expected.
While some analysts are confidently predicting that Bitcoin’s price will reach $100,000 in the year ahead, that outlook seems a little aggressive. However, it’s not out of the realm of possibility for Bitcoin to reach a new all-time high in the coming year. Certainly BTC could hit $70,000 or $75,000 in the next 12 months, especially as it is currently on track to reach $50,000 before the calendar changes to 2024 in a few weeks. With interest rates expected to fall, investors’ appetite for riskier assets such as crypto can be expected to intensify in coming months.
Stock Predictions for 2024: Nvidia’s Stock Doubles (Again)
Nvidia’s (NASDAQ:NVDA) stock tripled in 2023 and has been one of the best-performing securities in the benchmark S&P 500 index. However, despite the big rally this past year, NVDA stock is still undervalued, especially after its recent pullback following its earnings print. Among 47 analysts who track Nvidia’s progress, the median price target on the stock is 40% higher than where the shares currently trade. The lowest target is 15% higher than the current share price.
It’s likely only a matter of time before market sentiment catches up to reality with NVDA stock. And given its blockbuster growth and overwhelming demand for its microchips and semiconductors that power artificial intelligence (AI) applications, it’s not inconceivable for NVDA stock to double again in 2024. This is especially likely if the company continues to post blowout quarterly results that obliterate Wall Street forecasts. Also worth noting is that NVDA stock is attractively valued right now and cheaper than other mega-cap tech stocks such as Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT).
The Fed Won’t Cut Rates Until The Second Half Of The Year
While the U.S. Federal Reserve might be done raising interest rates, the timing of when it will begin lowering them remains in question. Futures traders are being aggressive with a 65% probability that the first Fed rate cut will occur in March 2024. By September, traders expect that the Fed Funds Rate will have declined by 250 basis points to 3%. That’s an extremely bullish outlook that doesn’t quite jibe with the current economic data or inflation itself.
The most recent numbers showed that the U.S. economy grew at a 5.2% rate in this year’s third quarter, which was even stronger than first indicated. Employment remains strong, and while inflation has been declining, at 3.2%, it remains well above the Fed’s annualized 2% target. While many economists continue to hold out hope for a recession to appear, none has emerged. And although markets continue to try and call Fed Chair Jerome Powell’s bluff, he remains adamant in his public remarks that the battle against inflation isn’t over. All this could mean that we don’t get the first rate cut until next summer.
Stock Predictions for 2024: Airline Stocks Stage A Comeback
Airline stocks continued to underperform in 2023 and failed to recover from the ravages of the Covid-19 pandemic. As 2023 comes to a close, the share price of American Airlines (NASDAQ:AAL) is up only 2% on the year versus a 20% gain in the benchmark S&P 500 index. However, this could change in the new year as air travel moves ahead of pre-pandemic 2019 levels and amid a wave of consolidation among smaller carriers in the industry.
Heading into the recent Thanksgiving holiday weekend, airlines in the U.S. were preparing for a record number of travelers. The Transportation Security Administration (TSA) anticipated the busiest ever Thanksgiving travel weekend with more than 30 million people passing through U.S. airports. Even before Thanksgiving, 2023 proved to be the busiest year on record for air travel. Seven of the 10 busiest days in U.S. air travel history occurred in the last six months. That bodes well for airlines that are still recovering from the pandemic when they lost a combined $168 billion.
Small-Cap Stocks Finally Recover
It’s been a tough slog for small-cap stocks. Smaller capitalized stocks have trailed large caps for about a decade now, and that underperformance continued in 2023. The Russell 2000 index has gained 6% over the last year, less than a third of the 20% gain seen in the S&P 500 index. The lack of a meaningful recovery in small-caps has frustrated many analysts, with some saying it is a sign that the market is not healthy and overly concentrated in only a handful of stocks.
The good news is that there are tentative signs that a recovery in small-cap stocks might be underway. As the broader market pulled back to start December, professional traders were buying small-cap stocks. On Dec. 4, the Russell 2000 outperformed the Nasdaq Composite index by more than 1 percentage point for the second consecutive trading day, the first time that has happened in more than six months. Also, while the Russell 2000 is up 6% on the year, it has risen 12% since the end of October, indicating that momentum is building. The year ahead could finally see a turning point for small-caps.
The S&P 500 Hits A New All-Time High
The S&P 500 is currently 5% below the all-time high of 4,796.56 that it reached on Jan. 3, 2022. Could it rise another 5% over the next year to reach a new all-time high? It’s not out of the realm of possibility, especially as several bullish catalysts form in the market. Right now, bond yields are falling, interest rates look to have peaked, and the economy remains strong. All of this bodes well for the stock market moving higher throughout 2024.
If we do indeed get a “soft landing” and manage to tame inflation without tipping the economy into a recession, then the market can be reasonably expected to rally higher in the next year. While their predictions differ, most analysts agree that equities are likely to rise sharply once the Fed does begin to cut interest rates and move them lower. Should bond yields continue to decline, it will serve as a huge catalyst for stocks. While nobody can predict the future, the current signs point to a bull run in 2024.
On the date of publication, Joel Baglole held long positions in AAPL, MSFT and NVDA. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
