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At the end of each year, I like to make a list of key predictions for the financial markets in the coming year.
Last year I achieved a nine out of ten success rate, including correctly calling for a rally of more than 20% S&P 500 and a rally of more than 30% in Nasdaq.
Not too shabby.
But this year I want to achieve 10 for 10.
Yesterday I published my first four big predictions for 2024. These included forecasting that the market will rise at least 15%, that growth stocks will continue to dominate, that AI stocks will remain hot, and that the stock market rally will increasingly broaden and fade from big tech stocks to smaller ones.
Today I will share three more of my big predictions for the stock market in 2024.
Let's take a look at them:
- Bitcoin will reach $100,000. Honestly, cryptocurrencies are pretty predictable. Every four years there is a Bitcoin halving event, where the supply of new Bitcoins released per transaction is halved. Between these halving events, cryptocurrencies tend to struggle. However, around the time of these events, a spike typically occurs. Specifically, cryptocurrencies start rising about 12 months before a halving and continue rising until 12 months after the event. The fourth Bitcoin halving is scheduled for April 2024. Consistent with previous patterns, the cryptocurrencies began their rise in early 2023, about 12 months before the fourth halving. This pattern appears to be continuing. As a result, it seems increasingly likely that cryptocurrencies will continue to rise leading up to the halving and the twelve months that follow. This suggests that crypto markets will maintain their momentum at least until early 2025. Our fundamental analysis shows that Bitcoin will reach $100,000 during this rally. We are very optimistic about cryptocurrencies and crypto stocks for 2024. Additionally, for what it's worth, we also accurately predicted BTC's bottom in late 2022 and significant rally in 2023.
- The real estate market is on the verge of a boom. Over the past two years, it has struggled with volatile mortgage rates, fluctuating from a 20-year low of 2% in 2021 to a 20-year high of 8% in 2023. However, this major headwind is now reversing. Mortgage rates have fallen sharply in the past two months, from 8% to 6.5%, as the Federal Reserve signaled an end to rate hikes and a willingness to cut rates. The market expects the Fed to start cutting rates in March 2024 and continue through 2025.
- Historically, mortgage rates have plummeted every time the Fed has cut rates. Consequently, we can expect a significant decrease in mortgage rates in 2024. These lower mortgage rates are expected to revive previously deferred demand for home purchases and free up existing housing supply. Next year, the housing market is expected to see a significant increase in both demand and supply. When both supply and demand in a market increase significantly, the market usually experiences a boom. We therefore expect a boom in the real estate market in 2024.
- The solar industry will recover strongly. In addition to the real estate market, it was also hit hard by rapidly rising interest rates in 2023. Most solar projects are financed and are becoming increasingly unaffordable due to high interest rates this year. However, there is still an enormous need for solar energy, coupled with significant legislative impetus for the expansion of solar infrastructure. Therefore, once interest rates fall in 2024 and affordability improves, we will likely see a surge in lagging demand re-entering the solar market. We expect the solar energy industry to recover significantly next year.
These are three more of my big market predictions for 2024.
Given my previous predictions, it's clear that I'm bullish on stocks for 2024. However, I believe certain sectors – such as cryptocurrencies, real estate and solar – will generate the highest returns.
These areas will be the focus of my investment strategy next year.
Tomorrow I will share my final three big predictions for the stock market in 2024. Stay tuned.
In the meantime, Click here if you would like to access my latest and greatest stock tips.
At the time of publication, Luke Lango did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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