For more than a year, some analysts have argued that the structural changes could be greater than in the pre-inflationary period. CovidWhen the Federal Reserve is prevented from achieving its inflation objective, Price pressures continued to decline in the third and fourth quarters Since last year.
The decline came with no sign of structural changes preventing the Federal Reserve from meeting its 2% inflation target. As a result, some analytical firms Raymond JamesIt is already assumed that the „soft landing” program can create opportunities in the investment sector for 2024.
In a sluggish macroeconomic environment, profit growth can be a decisive factor in determining the profit gap between different business sectors. Raymond James He explains that this is the reason for his star selection for 2024, comparing it to the culinary world, „Familiar spaces are enhanced by experimenting with new gadgets and objects.”
The analysis house ensures the ratings Technology Despite the good results in 2023 they remain reasonable as profits outpace price growth from 2021 onwards.Recent adoption of artificial intelligence Investors will turn it from the latest technological gadget to a fundamental investment asset. We hope that the focus on this sector will continue to be healthy and supportive,” he explains.
On the other hand, though The health sector had poor results last yearThe company is confident of delivering high profit growth across all segments in the current year. „This should whet the appetite of investors.”, says. In his view, continued investment in innovative drugs and procedures will only increase interest.
Regarding companies Industrybelieves that Below is the production function And the investments will continue. Among other catalysts, the Bank sees the legislation as the drivers to create effective incentives for the production of semiconductors (chips) and the Inflationary Reduction Act (IRA) for multinational companies based in the US. Although it's not the only field they believe you can hunt, they point out
About Small and mid cap companies At first glance they may seem unattractive, but the fundamentals hidden under the rug make them worth looking into, he says. „First, The stock is trading at a record discount In relation to large caps, in addition, they historically outperform the largest when emerging from recessions,” argues Raymond James.
Fourth, your three favorite sectors (industrials, healthcare and IT) are three of the four largest sectors in the small-cap stock index. „Furthermore, Total capitalization of the small cap market Some are smaller than the larger ones Individual Components of the S&P 500„That means small inflows can have a big impact on the speed and magnitude of the bullish trend,” the firm highlighted.
The United States is still in the lead
Among global equity markets, US stocks remain Raymond James' top pick, even as they outperform in 2023. „The Headwinds in development The analyst firm defends its investment thesis saying that „may affect profit trends in the coming quarters, particularly in Europe,” which gives more weight to Wall Street than other markets.
But it also points to other areas. According to him, emerging markets are a long-term opportunity for investors. „They should be upgraded at the end of the Federal Reserve's tightening cycleA slight weakness in the dollar and a rebound in economic growth in Asia and Latin America…we continue to see good opportunities in some emerging markets, particularly India and Mexico. Relocation of friendly companies should continue to provide opportunities development,” he describes.
In this context, Raymond James expects a moderate rise for most asset classes in 2024, but does not believe there will be a general „rally” in the markets in the coming months: „„You have to have a great commitment to a well-constructed asset allocation.”. As mentioned in the report, asset allocation strategies should be used for the long term. „He Time is also important: Decisive short-term moves can sometimes save us, but you need to know how to manage risk. „Don't let uncertainty scare us away from the market.”Termina Raymond James.