Global markets exhibited resilience in 2024 despite uncertainties surrounding the US election results, government policy changes, and shifting economic phases. US equities, particularly small-cap stocks, saw a strong rally following Donald Trump’s re-election, with tech stocks such as Nvidia and Tesla leading the way. Among Indian investors, US tech stocks have become staples, with more than a quarter of investments flowing into these two giants.
US Stock Market Outlook for 2024
The outcome of the US election, along with anticipated fiscal policies and tax cuts, has sparked optimism among investors. The S&P 500 has risen by 27.62% year-to-date (YTD), with November marking its best month of the year, gaining nearly 6%. Both the Russell Midcap and Russell 2000 (small-cap) indices also posted solid gains, reflecting strong market breadth.
Amid ongoing global geopolitical challenges and weakening growth in certain regions, analysts suggest focusing on portfolio diversification. With the market’s current dynamics, they emphasize balancing exposure to high-growth sectors, like technology and renewable energy, alongside defensive sectors such as healthcare and financials. Emerging markets should also be monitored, especially regarding currency fluctuations and geopolitical risks.
Emerging Sectors and Asset Allocation
As 2024 progresses, sectors beyond communication services and information technology have emerged as top performers. Financial stocks have taken the lead this year, followed closely by communication services and IT. The utilities sector also saw a rise, outperforming the broader S&P 500 index. This shift in sector dominance highlights the growing importance of diversification in an uncertain market.
Expert Insights on US Equities
Viram Shah, CEO of Vested Finance, expressed caution regarding US equities, pointing out that while a benign global growth environment justifies optimism for risky assets, valuations in some areas are high, particularly in comparison to Europe and emerging markets. He advised that caution be exercised when entering the market, especially with US stocks trading at higher multiples.
2024 US Stock Picks: Top Tech Stocks and ETFs
Tech stocks continue to dominate, with Nvidia and Tesla leading the charge in terms of investor interest. Nvidia accounts for 15.97% of total buy volume on Vested Finance, while Tesla follows at 10.28%. Other notable stocks include Alphabet (2.57%), AMD (2.53%), Microsoft (2.17%), and Amazon (2.15%), all showcasing strong investor confidence in cloud computing, digital advertising, and e-commerce.
Additionally, niche players such as Super Micro (3.38%) and MicroStrategy (3.35%) highlight a growing interest in specialized sectors like data centers and Bitcoin exposure. Broadcom (1.86%) remains an important player in the semiconductor sector.
ETFs Gain Popularity
Exchange-traded funds (ETFs) also gained momentum among Indian investors in 2024. Vested Finance reports that leveraged ETFs like ProShares UltraPro QQQ (TQQQ) and Direxion Daily Semiconductor Bull 3x Shares (SOXL) have seen significant interest, indicating a strong appetite for short-term trading opportunities. Other popular ETFs include Invesco QQQ Trust (QQQ), Vanguard S&P 500 ETF (VOO), and iShares Bitcoin Trust (IBIT). The data reflects a balanced approach to risk and reward, with Indian investors diversifying across both leveraged and traditional ETFs.
