Sara Naison-Tarajano’s Outlook on U.S. Stock Market in 2024
In an interview on CNBC’s “Closing Bell,” Sara Naison-Tarajano, Goldman Sachs’ global head of Private Wealth Management Capital Markets, shared her views on the 2024 U.S. stock market.
Positive Stock Market Trajectory
Naison-Tarajano offered an optimistic perspective on the market, citing strong economic data and earnings reports. She noted that over half of the companies had exceeded earnings expectations, providing a solid foundation for ongoing growth. However, she cautioned that the pace of gains seen since November might not be sustainable, dampening return expectations.
The “Magnificent 7” and Long-Term Investments
She promoted a strategy of remaining invested in the “Magnificent 7,” major tech-driven stocks leading market rallies. For taxable investors, she advised holding onto these positions instead of timing the market or realizing taxable gains, emphasizing the importance of large-cap allocations for growth and tax efficiency.
Cyclical Stocks and Russell 2000’s Potential
Naison-Tarajano highlighted potential in more cyclical stocks and the Russell 2000 index, which can offer attractive valuation opportunities. Economic indicators support a shift towards cyclical sectors, and with expectations of interest rate cuts, these areas present interesting opportunities to diversify investments.
Market Volatility and Election Year Dynamics
She foresees market volatility as the U.S. enters an election year. Based on historical patterns, she advised investors to view any dips as opportunities to add to their positions, particularly for long-term investors capitalizing on temporary market dislocations.
Interest Rate Cuts and Economic Outlook
Naison-Tarajano discussed the Federal Reserve’s interest rate policy and expects five rate cuts, potentially starting as early as May, to support continued market growth despite shifting timing of these cuts.
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