🎁Review & Outlook: XJO Eyes Records, Confidence Soars for 2024

[Miser][Heart]Hi Tigers,

On December 28, the $S&P/ASX 200(XJO.AU)$ closed at 7624.3 points, just one step away from 7632.8. Despite many ups and downs, the $S&P/ASX 200(XJO.AU)$ has gained 8.18% so far in 2023.

Weekly chart

As of post time, the top ten Australian stock market sectors with the highest gains are as below.

Data from Tiger Broker

The top 10 ASX star companies by YTD 2023 (as of December 28) are: $JAMES HARDIE INDUSTRIES-CDI(JHX.AU)$, $FORTESCUE METALS GROUP LTD(FMG.AU)$, $COCHLEAR LIMITED(COH.AU)$ , $GOODMAN GROUP(GMG.AU)$, $ARISTOCRAT LEISURE LTD(ALL.AU)$, $Stockland Corp(SGP.AU)$ , $WESFARMERS LIMITED(WES.AU)$, $Medibank Private Ltd(MPL.AU)$, $NEWCREST MINING LIMITED(NCM.AU)$, $Rio Tinto Ltd(RIO.AU)$ .

Data from Tiger Broker

The top 10 ASX ETF by YTD 2023 (as of December 28) are： $ISHARES FTSE GBL INFRASTRUCTURE (AUD HEDGED) ETF(GLIN.AU)$, $ETFS FANG+ ETF(FANG.AU)$ , $Loftus Peak Global Disruption Fund(LPGD.AU)$, $Montaka Global Long Only Equities ETF(MOGL.AU)$, $Betashares Nasdaq 100(NDQ.AU)$ , $BetaShares NASDAQ 100 ETF - Currency Hedged(HNDQ.AU)$ , $BetaShares Geared US Equity Currency Hedged(GGUS.AU)$ , $BetaShares Cloud Computing ETF(CLDD.AU)$ , $Betashares Global Cybersecurity(HACK.AU)$ , $ETFS Morningstar Global Technology ETF(TECH.AU)$

Data from Tiger Broker

🎁Questions for Tigers First：

• Which ASX stocks have you invested in over the past 2024?

• Which one has the highest yield?

• What companies are you optimistic about in 2024?

As 2023 draws to a close, our investment focus will inevitably turn to what lies ahead for the ASX next year. We are excited about potential market trends, economic changes, and how certain sectors will perform.

So let’s take a closer look at some of our informed insights and predictions for the ASX in the year ahead.

1. Another good year ahead for $S&P/ASX 200(XJO.AU)$ stocks.

$COMMONWEALTH BANK OF AUSTRAL(CBA.AU)$ Chief Economist Stephen Halmarick notes that "2024 will have more than its fair share of risks and challenges, particularly geopolitical risks as well as the United States presidential election."

But that doesn't rule out another good year ahead for ASX 200 stocks.

"Despite these obstacles, the Australian economy remains in relatively good shape," Halmarick said," If next year goes anything like this one, there could be some sizable gains. "

One big reason is that ASX 200 stocks may benefit from lower rates in 2024.

Earlier December, the Reserve Bank of Australia (RBA) opted to keep the official cash rate on hold at 4.35%. Although that pause was widely priced into the markets, the $S&P/ASX 200(XJO.AU)$ gained in the wake of the RBA's announcement.

And according to CBA's forecasts, $S&P/ASX 200(XJO.AU)$ stocks could enjoy some late 2024 tailwinds.

CBA is forecasting that the RBA will start cutting interest rates in September, lopping 0.75% off the official cash rate by year-end. CBA also expects to see the US Federal Reserve begin to reduce rates next year, and the RBA will then cut rates by another 0.75% in the second half of 2025.

2. How are Australian investors feeling as we enter 2024?

Interestingly, many investors are optimistic and forward-looking, maintaining a bullish outlook for the first half of 2024.

• Australian retail investors seem more confident overall, with 79% expressing optimism about the markets, up from 73% in June.

• This increased confidence extended beyond investments, as 68% felt upbeat about income and living standards.

• Even the Australian real estate market has gained in confidence, with 65% of investors expressing optimism, up from just over half (52%) at the start of the year.

• Investors plan to increase their contributions over the next 12 months. 32% plan to increase their regular contributions in the next 3 months.

The data suggests that investors are shifting to a more optimistic stance given the upbeat economic outlook.

3. ASX 2024: Watch Renewables, AI, and Emerging Stars

• As interest rates plateau and potentially fall, the sectors most sensitive to these shifts – namely renewables and real estate – will draw plenty of attention in the first half of the year.

• Markets are also expected to re-examine cyclical sectors that have been struggling recently, including small-cap enterprises.

• Industries like insurance and construction are slated for much higher scrutiny in 2024, potentially benefiting from economic adjustments and market movements.

• Amid these shifts, the ongoing focus on artificial intelligence (AI) will remain strong. AI-driven sectors are expected to be a huge draw for investors, especially as innovation explodes and new technologies transform a wealth of industries.

And as always, do your due diligence and research before investing in new assets.

4. Aussie Outlook: Fund Managers & Hidden Gems

In addition, the 2024 US election will likely spark some fireworks. And if we just focus on the companies and valuations today, the following ASX sectors also worth looking at.

Fund Managers:

• Rising tide on the horizon! Interest rate cuts could boost household confidence and inflows to quality fund managers like $GoGreen Investments Corp.(GOGN)$ , $Pinnacle Investment(PNI.AU)$ , and $Pacific Current Group(PAC.AU)$ .

• Property managers a longer play: Potential for strong returns in 2-3 years if rate cuts materialize.

ASX Small-caps:

• Hidden gems galore! Smaller businesses offer long-term value beyond the rebounded $S&P/ASX 200(XJO.AU)$ .

• Check out $Close The Loop Ltd(CLG.AU)$ , $Frontier Digital(FDV.AU)$ , $Universal Store(UNI.AU)$ , and $Airtasker(ART.AU)$ for exciting growth potential.

Source：

1. https://www.fool.com.au/2023/12/21/buying-asx-200-stocks-in-2024-heres-what-cba-predicts-for-the-year-ahead/

2. https://www.etoro.com/au/news-and-analysis/investing/what-will-2024-hold-our-asx-outlook/

3. https://www.fool.com.au/2023/12/22/my-prediction-for-the-best-performing-asx-sectors-in-2024/