In the wake of Super Tuesday, it is now clear that the election will be a rematch between former President Donald Trump and current President Joe Biden.
You can bet that temperatures will rise as we approach the election.
Meanwhile, there are a lot of problems around the world. There is the Russia-Ukraine war, Gaza and Israel, Yemen, Haiti, I could go on. We also have troops in Iraq, Syria, Somalia, the Congo, and other “hot spots.” Interestingly, Guyana is the hottest crude oil producer in Latin America, and Venezuela has been threatening to claim a significant portion of the country. The U.S. doesn’t have a military presence in Guyana… yet.
Clearly, the world is a chaotic place. So, you might wonder with all of this going on, why am I so optimistic about the stock market this year? In today’s Market 360, I want to talk about why the U.S. is an oasis.
I’ll discuss what makes America an economic force to be reckoned with, and why investors shouldn’t worry too much about who gets elected or what’s going on in the world. I’ll also mention what investors have to look forward to this year, and how you can best position yourself to profit.
The U.S. is an Oasis
The simple reality is that the U.S. is an oasis.
The first reason is because we are food and energy independent. China, Japan, Great Britain and the European Union, meanwhile, are much more dependent on both food and energy imports. Unlike Europe, we do not have to depend on anyone else for our energy needs.
For example, the United States Energy Information Administration recently announced that we produced more crude oil than any nation in history for the past six years in a row. In fact, average monthly U.S. crude oil production hit a new record high in December 2023, at more than 13.3 million barrels per day. Incredible.
Second, the U.S. is an entrepreneurial place by default. That’s because our 50 states are competing with each other, no matter who we elect to be president. Yes, we like to debate each other. But more than anything, we like to try different ways of doing things. If one state does better than the others, people move to that successful state.
The third thing to keep in mind is we have demographics working in our favor. The U.S. is a relatively young country. Most of Europe is getting older, and that makes it hard to grow your economy. Some countries are even shrinking… China shrunk by over two million people last year.
Now, countries like India and Brazil are growing, of course. But other countries are also not as good at assimilating immigrants as we are. Now, I realize immigration is a very sore subject. But the legal immigration we have in the U.S. is pretty darn orderly. The truth is, if you can add value, you can immigrate to America, and you will get assimilated pretty quickly. That just doesn’t happen in other countries, and it causes a lot of problems.
The reality is we just have a better model, plain and simple.
What You Need to Focus on This Year…
I know we live in a time where many politicians sow the seeds of division. And some people are openly talking about whether the U.S. will “break up.”
The truth of the matter is America is not breaking up. Despite our divisions, and no matter what’s going on in the world, our 50 states will still be economic laboratories. Americans are naturally optimistic, and that’s really important for economic growth.
The fact is presidential election years are good for boosting both consumer and investor confidence. We also have an excellent earnings environment as well as the expectation of multiple Federal Reserve rate cuts.
These positive vibes are unquestionably helping the stock market this year. In fact, I have said that this year is very similar to 1999, which was when many of my small to mid-cap stocks more than doubled!
Investors can sense that optimism is rising…
As I’ve mentioned before, there is about $8 trillion of cash on the sidelines beginning to trickle into the market. And once the Fed cuts key interest rates later this year, I’m predicting it will open the floodgates as investors seek better returns from what they’re earning from assets like money market accounts and Treasury bonds.
And while the market should have a fantastic year, the reality is that some stocks will do much better than others…
You see, I’m predicting that a lot of this money is going to flood the market’s hottest sector right now – artificial intelligence stocks.
That’s because AI is transforming the economy right before our very eyes. Sooner rather than later, every company will need to implement AI to better understand its customers or improve efficiency. And that will create a whole new list of winners and losers in the market.
I want each and every one of my readers to be positioned to profit from these changes – and not get left in the dust. And that’s why I delivered my Emergency Cash Bubble Briefing earlier this week.
In the briefing, I discussed what history tells us about how rate cuts impact the stock market. I also talk about the five AI-related plays I’ve found that are perfectly positioned to profit once the floodgates open.
And I even give away one of my top AI picks – absolutely free.
If you tune in to my Emergency Cash Bubble Briefing, you’ll also learn how you can become a member of Breakthrough Stocks, where you’ll get one to two new early-stage investment opportunities with massive upside potential nearly every month. And if you sign up today, you’ll get access to a handful of my brand-new AI-focused special reports.
Click here to watch a replay of my Emergency Cash Bubble Briefing now.
(Already a Breakthrough Stocks member? Click here to log in to the members-only website now.)
Sincerely,
Louis Navellier
Editor, Market 360
