HomeMarket NewsExperts Speculate on Potential 2024 Market Challenges and What's Expected to Flourish

Experts Speculate on Potential 2024 Market Challenges and What’s Expected to Flourish

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Analysts from J.P. Morgan have voiced concerns about the future of stock markets, predicting a gloomier landscape in the upcoming year due to softening consumer trends and a shift in investor sentiment.

The report on 2024’s global equity outlook from J.P. Morgan highlights that equities are currently overvalued with volatility at historic lows, and points out the looming geopolitical and political risks.

The report suggests that there will be modest global earnings growth next year, potentially leading to a downside for equities from current levels.

The S&P 500 (NYSEARCA:SPY) is estimated to experience earnings growth, potentially reaching $225 in EPS and 4,200 as a price target, albeit with a downside bias.

What’s concerning is that the S&P 500 (SPY) price target is at the lower end of predictions made by various Wall Street teams.

J.P. Morgan analysts recommend that investors consider overweighting “bond proxies and quality at a reasonable price,” emphasizing the utilities sector as a sweet spot within this mix.

The overweight sectors in the U.S. for 2024 according to J.P. Morgan are Energy (XLE), Communication Services (XLC), Health Care (XLV), and Utilities (XLU).

Meanwhile, the report indicates that the neutral sectors in the U.S. for 2024 include Materials (XLB), Financials (XLF), Information Technology (XLK), and Staples (XLP).

Conversely, the report suggests that the Industrials (XLI), Consumer Discretionary (XLY), and Real Estate (XLRE) sectors are expected to be underweight in the U.S. for 2024.

Additionally, J.P. Morgan has labeled quality style in the U.S. as overweight, while value, growth, and size are considered neutral.

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