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Introduction
The positive outlook of the stock market in 2023, has led many investors to imagine whether stock prices are en route to record highs in 2024. With the S&P 500 index staying positive into the second half of the year; investors are now imagining whether the bullish trend will last longer, thereby allowing stocks to create new highs in 2024. This article will help you learn more about the performance of the stock market so far in 2023 and other important factors that could support a bullish trend for stocks in 2024.
A survey of the current state of the stock market in 2023
The stock market has had a mixed performance in 2023. After a brutal decline in 2022, the S&P 500 which measures the overall performance of the US stocks has rebounded by 15.9% year-to-date as of July 2023. The tech-heavy Nasdaq Composite has fared even better, gaining over 31.7% in the same period.
However, there are some concerns that the market may be due for a correction, as the Federal Reserve is expected to raise the rates further before the year runs out, in a bid to combat inflation. This could weigh on economic growth and affect corporate earnings by year-end.
Are Stocks on the Road to a Record High in 2024?
As we approach 2024, investors have been wondering if the current bullish trend for stocks is likely to continue leading to stock prices creating a record high in the coming year.
While it is difficult to say for sure whether stock prices will reach a record high in 2024. Some important factors could contribute to stocks reaching a new record high in 2024.
First, the US economy is expected to continue growing at a healthy pace. This might lead to strong corporate earnings growth, which will support stock prices.
Second, the interest rate tightening cycle is expected to round off in 2023. This means there are chances that the Central Banks may begin lowering the rates in 2024, which will make it easy for companies to obtain loans again to expand their business. This might boost stock prices in 2024.
Third, global economic growth is expected to pick up in 2024. This will boost demand for goods and services, which will benefit corporate profits.
Factors to Limit the Performance of Stocks in 2024
There are equally some potential factors that could prevent the stock market from reaching a record high in 2024.
High inflation rate: The inflation rate has remained high up to this point with the Fed’s target far from being achieved. If inflation gets out of control, it could force the Federal Reserve to raise interest rates more aggressively than expected. This might result in a recession, which would affect corporate earnings and hinder the bullish trend for stock prices.
The risk of a recession: If a recession does occur, it would likely lead to a significant decline in stock prices. Investors should carefully monitor these factors when making decisions on whether to buy stocks using their best share dealing accounts in 2024.
US-China trade Wars: Should the trade war between China and US escalate, it could weigh on global economic growth and hurt corporate profits.
The pace of economic growth: If the economy slows down significantly by year-end, it could lead to lower corporate earnings and a decline in stock prices in 2024.
Conclusion
The outlook for stocks in 2024 appears very positive. However, some factors could derail the bullish trend market. Investors need to understand the risks involved in stock trading before moving to buy stocks using the best online trading brokers.
