In a bullish outlook for the U.S. stock market in 2024, Goldman Sachs predicts a 5% gain in the S&P 500 index” data-wpil-keyword-link=”linked”>S&P 500 index. The investment bank’s forecast is based on expectations of stable corporate earnings and a modest economic expansion, which could alleviate concerns about a recession.
Goldman Sachs anticipates the broader market to deliver a total return of approximately 6%, slightly below the typical average seen in presidential election years. The outlook is grounded in the belief that strong early economic growth might lead to reassessments of Federal Reserve rate cuts beginning in the second quarter of the year. While uncertainties surrounding the presidential election may initially impact risk appetite, these concerns are expected to subside as the year progresses, potentially boosting U.S. equity prices.
In addition to its market forecast, Goldman Sachs has identified three key investment strategies for investors to consider:
Concentrate on quality stocks such as Alphabet (NASDAQ:GOOGL), O’Reilly Automotive Inc. (NASDAQ:ORLY), Church & Dwight Co., Inc. (NYSE:CHD), and Accenture plc (NYSE:ACN).
Invest in high Return on Invested Capital (ROIC) growth stocks like NVIDIA (NASDAQ:NVDA), Enphase Energy Inc. (NASDAQ:ENPH), ServiceNow Inc. (NYSE:NOW), Eli Lilly and Company (NYSE:LLY), and Albemarle Corporation (NYSE:ALB).
Explore undervalued cyclicals, including Toro Co (NYSE:TTC), Alaska Air Group, Inc. (NYSE:ALK), Delta Air Lines, Inc. (NYSE:DAL), Crocs, Inc. (NASDAQ:CROX), and John Bean Technologies Corp. (NYSE:JBT).
Goldman Sachs also advises diversification across Information Technology, Health Care, and Energy sectors to capitalize on potential growth opportunities.