Market review from UTEX – week 52
What to expect in the new year and where to invest for the mid-term.
Markets closed in the positive for the eighth week in a row, something that hasn't happened since 2017!
The SPY is up just under 25% for the year, the Nasdaq added 50%. And all of this against a background of rising the interest rate.
BTC is bringing to buyers and sellers in the $40–$44.5k range for now. Going up will mean that the way to $50k is open, further forecasts depend already on your imagination. Some analysts don’t rule out a rise to $100–$160k by the end of 2024. Meanwhile, altcoins continue their strong rise.
In the coming year, the Fed will start cutting the rate, and funds have reportedly accumulated $5–6T of cash that hasn’t yet gone into stocks. Not everyone got into the market before the rally of the last two months, and it's very likely that this cash will gradually get there on drawdowns.
Today is Christmas Day and the markets will be closed. Traditionally, the last week of the year and the first weeks of the new year see a sharp drop in trading volume.. That's why we recommend to reduce intraday risk and the number of trades already now.
In the new year, the markets will open on January 2.
Three sectors for the mid-term in 2024
For the optimists, Chinese companies.
Over the past two months, most stocks and sectors have already moved off their lows, and there are still many Chinese companies whose prices are still close to their bottoms and are attractive for the mid-term. Considering the increased risk appetite of investors, it's possible to carefully target a few stocks with a small stop.
Our choice: BABA, JD, BIDU, NIO, YUMC, XPEV.
For the pessimists – companies from the Utilities sector, suppliers of electricity, gas and water.
Usually this sector performs well in times of crisis, Utilities are considered a great protective assets.
If you consider the SPY and Nasdaq growth inadequate and are pessimistic about the outlook for U.S. markets, it is worth buying a few stocks from the sector. It's down 7% for the current year. But if things roll into the abyss, these companies should hold up and even grow.
Our choices are EXC, AEE, SRE, D, WEC.
For the realists, the tech sector and anything related to artificial intelligence in one way or another.
In a recent poll in our Telegram channel, 60% of those who voted said that the AI sector has the greatest potential in 2024. It's hard to disagree that there is every reason for this industry to grow.
Every day there is news about how this or that company is implementing artificial intelligence in its products and services, which positively affects its performance and quotations.Yesterday it became known that in the last round the capitalization of Open AI, the creator of ChatGPT, reached $100 billion. A fantastic result for a private company.
The AI topic clearly requires separate coverage, but for now our choice is as follows: NVDA, MSFT, TSLA, AMZN, GOOG.
