US Markets
Thursday, December 28th, 2023 5:36 pm EDT
Key Points
- Positive Sentiment for Jerome Powell and Federal Reserve: The key takeaway from the CNBC’s Delivering Alpha Stock Survey is a high level of confidence among the 300 surveyed investors, traders, and money managers in Jerome Powell and the Federal Reserve. An impressive 88% of respondents rated the Fed’s performance in 2023 as excellent or good, marking an improvement from the 77% recorded in the previous survey three months ago. Additionally, more than half of the participants anticipate the Federal Reserve to initiate rate cuts in the second quarter of 2024.
- Investment Preferences for 2024: The survey indicates that investors are predominantly inclined to invest in well-established market indices. Approximately 28% of those surveyed plan to put their money in the S&P 500, while 16% express a preference for investing in Nasdaq 100 stocks. Regarding specific investment choices, 12% believe China will experience the strongest growth, followed by Japanese stocks, high-yield bonds, long-range US bonds, and bitcoin, each receiving 8% support. Notably, gold, despite being near record highs and having gained 15% in 2023, did not find favor with any of the surveyed individuals.
- Tech Investments, Sector Preferences, and Risk Concerns: The survey reveals a strong preference for big-cap tech stocks, particularly the “Magnificent 7.” Microsoft emerges as the clear favorite, with 44% of respondents expressing a preference for this tech giant, followed by Amazon at 24% and Nvidia at 12%. The tech sector remains a favored area for investors looking to invest in artificial intelligence (AI), with 58% indicating they would allocate their funds there. When considering potential risks for stocks in 2024, stubborn inflation and problems with commercial real estate rank highest, closely followed by concerns about slow growth. Additionally, geopolitical factors such as war overseas and a more militarily aggressive China are noted as risks by 11% of respondents each. Interestingly, the 2024 election is perceived to have little impact on the investing strategy of the majority (85%) of those surveyed.
In the latest CNBC’s Delivering Alpha Stock Survey poll, the sentiment among the 300 investors, traders, and money managers surveyed is largely in favor of Jerome Powell and the Federal Reserve. An impressive 88% of respondents rated the Fed’s performance in 2023 as excellent or good, surpassing the 77% from the previous survey three months ago. Over half of the participants anticipate the Fed to commence rate cuts in the second quarter of 2024. The preferred investment choices for the upcoming year are predominantly centered around the S&P 500, with 28% expressing it as their primary target, followed by 16% favoring Nasdaq 100 stocks.
In terms of specific investments, about 12% of respondents believe that China will experience the strongest growth, closely followed by Japanese stocks, high-yield bonds, long-range U.S. bonds, and bitcoin, all receiving 8% support each. Interestingly, not a single participant in the survey favored gold as their investment choice for 2023, despite the commodity being near record highs and having gained 15% during the year.
Regarding sectors, 35% of respondents predict that financials will outperform in the new year, while 23% prefer high-dividend stocks. Notably, the survey introduced the concept of the “Magnificent 7” versus the other 493 S&P stocks, with an overwhelming 77% expressing confidence that the Magnificent 7 will collectively fare better than the rest of the S&P 500. Among the tech giants, Microsoft emerges as the top pick at 44%, with Amazon trailing at 24%, and Nvidia at 12%. The survey also indicates that 58% of investors looking to invest in artificial intelligence (AI) favor big-cap tech, with Microsoft (39%) and Nvidia (35%) being the most endorsed stocks in this category.
In terms of safe havens during market uncertainties, 35% of respondents consider money markets as the best place, followed by 31% in U.S. bonds and 19% in cash. Only 7% would choose gold, while 4% and real estate. The weakest sectors of the year, including healthcare, energy, staples, and utilities, saw utilities down by 11% in 2023. When asked about the sector with the most upside potential in 2024 among the weakest performers, 56% identified healthcare, followed by 24% for energy stocks, 12% for consumer staples, and 8% for utilities.
Looking at potential risks for stocks in 2024, stubborn inflation and issues with commercial real estate topped the concerns, closely followed by slow growth. Geopolitical factors such as war overseas and a more militarily aggressive China each scored 11% in terms of potential risks. Lastly, in relation to the 2024 election, only 15% of respondents felt it weighed heavily on their investing strategy, while the majority (85%) believed it would have little impact on their decision-making processes.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/12/28/investors-in-2024-a-new-cnbc-delivering-alpha-stock-survey.html
