Ask Me Anything: How to Invest in the US Stock Market for 2024?

January 26, 2024

In this edition of our “Ask Me Anything” series, we tackle a range of questions relating to the US stock market. There were other questions on taxation matter for foreigners investing in the Singapore market and how to position your asset allocation over the next half year.

1. What is the general market sentiment for the US stock market in 2024?

The market is ending 2023 on a high note with a recent broad-based rally. For 2024, the base-case scenario suggests a continuing bull market as long as a recession is avoided, and the market could reach new all-time highs​​.

2. What are the expected major drivers of the US stock market in 2024?

In 2024, the US stock market is likely to be influenced by several key factors, including the Federal Reserve’s monetary policies, inflation rates, geopolitical tensions, and the performance of the global economy. Technological advancements and shifts in consumer behavior post-COVID-19 will also play crucial roles. We also expect to see the US Presidential election to influence the market movement towards the end of the year.

3. How are the Federal Reserve’s policies expected to influence the market in 2024?

The Federal Reserve signaled potential rate cuts in 2024, a move welcomed by markets. This could contribute to a continued broad-based bull market if, as expected, the Fed pivots, earnings advance, and the economy continues to avoid recession​​.

 4. What are the key risks for the US stock market in 2024?

Risks include the possibility of inflation pressures rising again, forcing the Fed to walk back on rate cuts. Additionally, much of the soft-landing narrative has already been priced into the market​​.

5. Are there concerns about a potential recession in 2024?

Recession risk remains a concern, especially since yield curve inversion signals indicate the highest risk of recession between 14 and 24 months after the onset of inversion, covering most of 2024​​.

6. What sectors are expected to outperform in the US stock market in 2024?

Sectors such as healthcare, renewable energy, and technology are anticipated to outperform in 2024. Healthcare may benefit from ongoing innovations and an aging population, while renewable energy could thrive due to increasing focus on sustainability. Technology remains a key driver of growth, especially in areas like AI and cybersecurity.

7. What are top US stocks in 2024?

Our top US stocks for 2024 includes Microsoft, Disney, Bank of America, Coca-Cola and Intel Corporation. Here is a summary of the driving factors for these stocks.

  1. Microsoft (MSFT): Strongly positioned for growth in cloud and AI, with a resilient business model and significant potential in generative AI and other technological advancements.
  2. Disney (DIS): Expected to have a comeback story with its leadership changes and potential in various segments like theme parks, entertainment franchises, and streaming services.
  3. Bank of America (BAC): As a large and stable financial institution with a diverse range of services, it’s seen as a resilient investment, especially considering its significant ownership by Warren Buffett.
  4. Coca-Cola (KO): Known for its consistent growth and dividend reliability, Coca-Cola continues to hold a significant market share in the beverages sector and is viewed as a stable investment.
  5. Intel (INTC): Despite past challenges, Intel is seen as a potential turnaround story, especially with its focus on AI and other technological innovations, as well as improvements in its business model and operations.

8. What is the best asset allocation for the next half year?

For the next half of 2024, asset class positioning is characterized by moderate growth, cooling inflation, and less restrictive policy, expected to be supportive for asset markets. Equities are upgraded to a modest overweight while fixed income could see some opportunities.

9. Will a foreigner invest in the Singapore stock market be taxed for capital gain or dividend earned?

In general, foreigners are not subject to capital gains tax on stock market investments. Dividends received from Singapore-listed companies are also not taxed for foreigners.

We are excited to have addressed some of these questions from our members, and our aim for this article is to deliver a straightforward and succinct summary of the varied and intricate factors influencing the current market environment.

Our goal is to provide clarity and direction to both individuals and businesses as they tackle these challenges.

We eagerly look forward to the next AMA session, where we’ll continue to explore and discuss important economic trends and opportunities.

Disclaimer: ProsperUs Head of Content & Investment Lead Billy Toh doesn’t own shares of any companies mentioned.

Billy Toh

Billy is deeply committed to making investment accessible and understandable to everyone, a principle that drives his engagement with the capital markets and his long-term investment strategies. He is currently the Head of Content & Investment Lead for Prosperus and a SGX Academy Trainer. His extensive experience spans roles as an economist at RHB Investment Bank, focusing on the Thailand and Philippines markets, and as a financial journalist at The Edge Malaysia. Additionally, his background includes valuable time spent in an asset management firm. Outside of finance, Billy enjoys meaningful conversations over coffee, keeps fit as a fitness enthusiast, and has a keen interest in technology.

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