At the end of every year, I like to make a list of big predictions for the financial markets in the upcoming year.
Last year, I went 9 for 10, including correctly calling for a greater than 20% rally in the S&P 500 and a greater than 30% rally in the Nasdaq.
Not too shabby.
But this year, I’m aiming to go 10 for 10.
Over the past two days, I’ve posted seven big predictions for 2024. These include a forecast for the market to rise at least 15%, growth stocks to continue dominating, AI stocks to remain hot, and the stock market rally to broaden from huge tech stocks toward smaller ones. I also predicted that Bitcoin (BTC-USD) will hit $100,000 this year, the housing market will boom, and solar stocks will reheat in a significant way.
Today, I’m going to post my final three big predictions for the stock market in 2024.
Let’s check them out.
Nuclear Stocks Will Go Nuclear
Nuclear energy has experienced an enormous resurgence over the past 24 months. Countries are reopening shuttered nuclear power plants and planning new construction, driven by the volatile geopolitics that underscore the unreliability of fossil fuels.
High interest rates have also made new solar and wind construction prohibitively expensive. The global consensus seems to be shifting from “nuclear is bad” to “nuclear energy will be an essential part of a future energy mix.” We believe this shift is entering its third year of what will be a 10- to 15-year trend.
Consequently, nuclear stocks, which were very strong performers in 2023, are expected to continue their strong performance in 2024.
The Consumer Will Keep the Economy Strong
I am very bullish on the U.S. consumer in 2024.
The headwinds that depressed consumer sentiment and spending in 2022 and 2023 are reversing, poised to become tailwinds in 2024.
Inflation has returned to “normal,” and commentary from leading retailers suggests that the recent streak of steady price hikes is over.
Meanwhile, wage growth has steadily outpaced inflation since May 2023, a trend that should continue throughout 2024. This should help rebuild savings accounts and boost consumer confidence. Interest rates are also expected to fall in 2024, making big-ticket purchases more affordable and accessible.
All these factors combined suggest a potential explosion in consumer spending this year. We are very bullish on consumer stocks in 2024.
The AI Chips Market Will Stay Red-Hot – But Nvidia Will Cool Off
The AI chip market grew exponentially in 2023 as companies worldwide rushed to acquire next-gen chips for building AI applications.
Most of this AI chip “gold rush” centered around Nvidia, the most capable general-use AI chipmaker. However, we are witnessing a significant shift in the AI market toward building custom AI applications that require custom AI chips – an area where Nvidia does not dominate.
We anticipate that the AI chip market will continue to grow significantly in 2024, but the growth will be centered around custom AI chipmakers rather than Nvidia. We are very bullish on AI chip stocks not named Nvidia in 2024.
The Final Word
Those are my final three big predictions for 2024.
In summary, I’m bullish on stocks in 2024, but I also think that certain parts of the market – like nuclear energy and AI chips – will post the biggest returns.
That’s where my investment focus will be next year.
Tomorrow, I’ll be posting all 10 of my big predictions for 2024 in one post.
In the meantime, click here if you want to get my latest and greatest stock picks.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.