US stocks may rise next year. Bank of America gave top ten trading suggestions for 2024

Zhitong Finance ·  12/05/2023 08:01

Source: Zhitong Finance

Bank of America Securities said that the overall stock market may rise next year, but this will be an even more difficult process.

Bank of America Securities said that the overall stock market may rise next year, but this will be an even more difficult process. The bank expects the S&P 500 index to close at 5,000 points by the end of 2024, with room for about 9% increase from the current level.

Bank of America strategist Michael Hartnett said that there are currently two types of “zeitgeist”: first, everyone thinks we will bounce back until Valentine's Day next year. Everyone is emotionally bullish, yet intellectually bearish, and may stay this way until the general election; second, our “parachute” (meaning protective measures) in 2024 is a general election, because the election means stimulus, which means a soft landing rather than a hard landing is more likely.

Michael Hartnett also listed his top ten trading suggestions for next year:

1. Extend the 30-year hybrid bond portfolio - high yields+stock returns without stock risk

2. Go long on zero-interest bonds — “peak yield” +hard landing hedging

3. Go long on IG technology stocks - own the balance sheet of technology stocks, but do not own earnings per share of technology stocks in 2024

4. Going long on European subprime bonds - winners under the theme of high yield and “peak yield”

5. Going long on Gulf Cooperation Council dollar bonds - strong balance sheets of member countries+hedging the energy crisis

6. Go long on the yen - the Bank of Japan's interest rate hike triggered a large amount of capital to return to Japan

7. Go long on emerging market assets - the dollar peaked

8. Go long on “uncarved diamond” stocks - buy the best stocks in the least popular leveraged sectors such as banks, utilities, real estate investment trusts, etc.

9. Going long (compared to the “Big Seven” of US stocks) troubled technology companies - low interest rates mean low earnings per share, which is much better for biotech and renewable energy stocks than crowded tech giants

10. Go long globally except the US ETF-iShares MSCI (ACWX), the average weighted index ETF-Rydex S&P (RSP) — Under the consensus prospects of a soft landing, a wider range of stocks, small-cap stocks, value stocks, and other countries' stocks look good in terms of risk and return


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