On Tuesday Eastern Time, Goldman Sachs released its latest report stating that after the Federal Reserve raised interest rates, the US economy appeared to perform well, and the market's performance in 2023 far exceeded expectations. They expect that this good situation is highly likely to continue in 2024.
The strategists of the bank wrote in the report: "The prospect of the US economy looks really bright." They mentioned that the yield of US treasury bond bonds is declining, the Federal Reserve is about to turn to a more relaxed monetary policy, and the GDP growth rate is also higher than the market consensus expectation.
Looking ahead to 2024, Goldman Sachs suggests that the following seven themes may affect the market.
1. Generative artificial intelligence
2023 is undoubtedly the year of artificial intelligence, and Goldman Sachs predicts that the theme of artificial intelligence will continue to run through the stock market in 2024.
Goldman Sachs predicts that artificial intelligence technology and innovation will ultimately increase productivity in various industries and increase the annual GDP growth rate of the United States by 0.4% in 2024.
Strategists recommend AI concept stocks such as Amazon and Nvidia, stating, "For companies that can provide computing power and platforms to support AI initiatives, AI may bring tremendous prosperity."
2. Green energy expenditure
Goldman Sachs strategist wrote in a report, "The necessity of addressing climate change globally is becoming increasingly evident, and as governments encourage a new wave of development to help transition from fossil fuels to renewable energy, businesses are responding to emerging opportunities."
Goldman Sachs pointed out that companies in the solar energy industry, those extracting methane gas from waste, and nuclear energy companies may benefit from this trend.
3. Private credit
Goldman Sachs stated that investors will expect returns on private debt transactions to surpass those in the public market this year, and the private credit retail products offered by asset management companies have gained attractiveness in the past year.
Strategists point out, "Insurance companies are increasingly allocating funds to the private market, creating a reliable and massive source of funding for this market."
4. "Echoes of the post pandemic era"
As the world has gradually adapted to the new normal in the next few years after the COVID-19 epidemic, the theme of "post epidemic" may have reached the final stage.
After many years of abnormality caused by the COVID-19 epidemic, many industries such as global transportation and tourism are still adjusting. Goldman Sachs strategists said that there are two other industries worth noting, namely, finance and technology. In 2023, the financial industry will emerge from the regional banking crisis, while the technology industry will experience the collapse of the post epidemic foam in 2021.
"Entering 2024, the tone seems to be indeed changing," Goldman Sachs strategists say, and corporate recruitment seems to be accelerating, especially in software companies. And this sign is often accompanied by accelerated industry growth.
5. Weight loss pills
The concept of "weight loss pills" emerged in 2023, causing a frenzy of market speculation. Goldman Sachs believes that the frenzy for weight loss pills will continue in 2024.
In 2023, due to the popularity of its weight loss pills, Lilly's stock price has risen by nearly 60%, making it the ninth largest company by market value in the S&P 500 index and hailed as one of the main winners of 2023.
Goldman Sachs stated that in 2024, Eli Lilly's competitors will launch similar drugs to address a range of issues beyond obesity, thereby continuing to drive the hype of the weight loss drug concept. Strategists predict that the demand for GLP-1 drugs will continue to be a key trend worth paying attention to.
6. Revitalization of manufacturing industry
Goldman Sachs stated that climate change, the chain reaction of the post pandemic era, and the trend of de globalization will all contribute to the revival of US manufacturing.
Goldman Sachs estimates that by 2030, industry trends in the semiconductor, electric vehicle, and charging station sectors in the United States may drive up to $600 billion in incremental capital expenditures.
7. The Internet is entering a more mature growth stage
Goldman Sachs stated that compared to 10 years ago, the growth of internet companies is moving towards a mature stage. As the growth rate of the internet slows down, it encourages companies to explore new fields and sub industries to maintain expansion.
Goldman Sachs stated that this has driven "an exploration that blurs the operational boundaries between advertising and business, consumer habits, and overall consumer behavior within the scale ecosystem.".
Goldman Sachs stated that Amazon is one of the companies expected to thrive in this field.