Will November’s Gains Continue in 2024?
Holiday spending is expected to reach record levels this year.
The National Retail Federation (NRF) forecasts that holiday spending in November and December will grow between 3% and 4% from 2022 to between $957.3 billion and $966.6 billion.
I can’t help but remember that this time last year, most market analysts were predicting a recession in 2023. Some said we were already in one.
As we close out 2023, no recession appears on the horizon.
This year has been positive in the market, and consistent consumer strength has surprised some analysts again and again. If the NRF is right, no big spending slow-down is in the offing.
At this time last year, I sat down with Louis Navellier, Luke Lango and Eric Fry. After a huge market downturn in 2022, they were all bullish on prospects for stocks in 2023.
Why were they bullish? They saw certain corners of the market benefiting from the tailwinds of oversold conditions and artificial intelligence.
As we enter December, I got a chance to speak with them all again, and they believe this market has a lot of legs to continue climbing in 2024.
When I spoke to Louis, he emphasized that earnings for Q4 of 2023 and the first quarter of 2024 are going to be spectacular. A lot of this will be because of easier year-over-year comparisons, but Louis solely picks stocks with strong fundamentals – such as earnings growth and revenue growth – regardless of market conditions.
That’s part of the reason why his stocks can go up while others do not. The money follows earnings and revenue growth.
In his latest issue of Accelerated Profits, Louis acknowledges that this has been a volatile year in the markets. But that didn’t mean he sat out in cash. As you might imagine, he found opportunities.
Events like the regional banking crisis, the Israel-Hamas conflict and central bank action have rocked the stock market, while the artificial intelligence craze, the moderation in Treasury yields and energy stocks return to favor have supported higher stock prices. Clearly, there’s been a lot for the market to digest this year, but there’s also been a lot that we can be thankful for, especially as investors.
As an example, November has turned out to be a fantastic month for our Accelerated Profits stocks.
Our Accelerated Profits Buy List has soared nearly 11% higher in November so far, versus the S&P 500’s 8.4% gain and the Dow’s 6.9% rise. Breaking it down further, we’ve had 26 stocks post double-digit gains between 10% and 73% over the past four weeks.
The AI story will only grow larger next year
As someone focused on tech investing, Luke Lango has found plenty of reasons to feel bullish because of the AI megatrend.
When I spoke to him, he pointed to rapidly declining inflation and the likelihood of rate cuts in 2024 as only adding more force to the market tailwinds created by the AI boom.
Here is an excerpt of some commentary about the market from Luke.
October’s personal consumption expenditures (PCE) report was released [Thursday] morning. And it showed that PCE inflation rose just 3% last month, lower than expected and below September’s inflation rate. At the same time, the Cleveland Fed’s Nowcasting model calls for a PCE inflation rate of just 2.8% in November.
In other words, the disinflation trend has returned, and it looks like it’s here to stay.
Meanwhile, that same PCE report showed that real personal spending trends remain healthy (+2.2% year-over-year). And we heard more dovish commentary from other Fed members today, lending further credence to the idea that the central bank will cut rates in 2024.
All signs still point to a soft landing next year, and the historical precedent for soft landings is major stock market strength.
Luke has been cashing in some gains this month in his AI Trader service (perhaps thinking of the holidays).
If you’re new to the Digest, the goal of AI Trader is to deliver fast returns based on AI powered investing in stocks in Stage 2 uptrends. This week, Luke cashed in on a recent pick, Rover (ROVR).
The stock soared about 70% in less than 2 months. Given that Rover’s upside is now capped due to a buyout from Blackstone, Luke recommended the sell.
Congratulations to his AI Trader subscribers.
The market won’t even need a rate cut
When I spoke to Eric, he said it doesn’t even matter if the Federal Reserve cuts rates next year or not. As soon as the market feels they are done raising and leaning in the direction of cuts, the market will march higher.
Eric has written that during bull markets, every investor feels like a genius. We all grow accustomed to “easy gains” and the immediate gratification of stocks that only go up.
But bear markets are inevitable, and part of the cost of investing.
None of us can control the market environment, so we must focus on what we can control – stock selection and patience.
In The Speculator, Eric recommended cashing in two options winners this week.
On three prior occasions, I have recommended selling a one-quarter position in the Amazon calls. Therefore, today’s sale represents the final one-quarter position and will close out the trade.
Averaged together, these sales produced an all-in gain of about 240%. I won’t know the price number until today’s final sale is complete.
I remain as optimistic as ever about Amazon’s strategic position in the “AI Race” and remain bullish about the stock’s long-term prospects. But since this option expires in less than two months, I considered it prudent to lock down the gains.
Eric also took partial gains in another call option that is still active so I can’t reveal that out of respect for his subscribers to The Speculator.
Summing up, Louis, Luke and Eric have cashed in on select opportunities in 2023 and believe there is a lot more coming next year.
I hope the market has provided you some extra cash for the holidays … don’t let the shopping wait too long!
Enjoy your weekend.
Luis Hernandez
Editor in Chief, InvestorPlace
