When will the stock market rise in 2024: The signals you need to know

The 2024 Global Outlook Draws Two Opposite Realities

If there’s one thing that defines the worldwide stock market at this moment, it’s divergence. While major Western markets show fatigue after aggressive rises, Asian markets awaken with renewed vigor. This bipolar dynamic will be decisive when the stock market rises in the coming months, especially considering that Asia is also leading a transition toward renewable energies and artificial intelligence technologies that will reshape global investment.

Why 2024 Will Be Decisive: Three Megatrends

Unsustainable debt and inflationary pressure

The accumulation of debt on a global scale after the pandemic, logistical crises, and the invasion of Ukraine has created a critical scenario often underestimated. Japan reaches debt-to-GDP ratios of 252%, Singapore 160%, Italy 151%, and even the United States 114%. These figures are not just numbers: they explain why inflation will persist in 2024, particularly in Latin America, Africa, and Eastern Europe. Argentina, Sudan, Kenya, and South Africa face accelerated price crises, while governments print currencies uncontrollably.

Accelerated energy transition after COP28

The Dubai summit closed 2023 documenting that Earth was 1.4°C warmer than the historical average. This urgency has made renewable energies a priority for global investors. Solar and wind companies will see massive capital injections, while fossil fuels lose investor appeal in the medium term.

Asian economic rise

China, Korea, Japan, Vietnam, Thailand, and Indonesia form an expanding bloc contrasting with Western moderation. China stands out as a leader in renewables, electric transportation, infrastructure, and fintech. Its influence in Southeast Asia reinforces dynamics that benefit local markets over European and North American economies.

Technical Reading: Where the Market Will Rise and Where It Will Fall

Western markets in correction

New York (NYSE): Moving averages anticipate a bearish crossover after climbing from 14,800 to nearly 17,000 points. Historically, when the index surpasses record highs, it suffers severe corrections. With speculative markets saturated, it’s unlikely to continue rising after this peak.

Frankfurt (DAX): Similar situation. Jumped from 14,680 to 16,750 points in a few weeks, reaching all-time highs. Moving averages since mid-December point to a decline in January, though moderate. This is a technical correction expected after excessive bullish momentum.

Shanghai Stock Exchange: Bullish Opportunity

Shanghai (SSE): Opposing dynamics dominate here. Closed 2023 with strong bullish momentum after maintaining a flat trend throughout the year. Historically, Chinese markets alternate long flat periods with spectacular rallies (2007 and 2015). From 2017-2023, it was consolidating; now it’s ready for a new accelerated climb. Technically, Shanghai is the most attractive option for investment.

When the Market Will Rise: Winning Sectors and Companies

Renewable energies: Winning bet

Iberdrola, Canadian Solar, Siemens Gamesa, and First Solar lead the expansion of solar and wind farms. COP28 accelerated decarbonization commitments, ensuring sustained investment flow throughout 2024.

Artificial intelligence: Revolutionizing technology

Nvidia, Microsoft, Alphabet (Google), Adobe, and Baidu dominate AI. The sector is just beginning its exponential expansion. If AI developments continue to accelerate, these stocks will experience significant momentum.

Sustainable transportation: Transition underway

Tesla, BYD, Daimler, and Hyundai lead electric and hydrogen-powered vehicles. Governments and investors flood capital into transportation decarbonization.

Asian markets: The main driver

Companies operating in China, Korea, Japan, Thailand, Vietnam, Malaysia, Indonesia, and Singapore capture growth surpassing that of developed Western economies.

When the Market Will NOT Rise: At-Risk Sectors

Financial companies under pressure

Global debt stress impacts banks. With governments, corporations, and families heavily indebted, the risk of defaults increases. The financial sector faces 2024 with fragility.

Real estate stagnation

The Chinese real estate market appears blocked. Europe and the U.S. face similar dynamics. Families struggle to pay mortgages and rent, foreshadowing real estate bankruptcies.

Fossil fuels: Long-term decline

Although short-term demand may raise oil prices, structurally fossil fuels are losing competitiveness. The global energy transition leaves them behind.

Western countries without innovation

European and U.S. corporations betting on technology and renewables will perform positively, but the bulk of Western markets will slow down.

Investment Strategy for 2024

The year presents complexity: debt accumulation, persistent inflation in critical regions, and climate change impacting economies. But these difficulties create clear opportunities for those who interpret trends.

The key: When the market will rise depends on whether your portfolio captures the shift toward Asia, renewable energies, sustainable transportation, and AI. These four pillars will define superior returns. Simultaneously, avoiding excessive exposure to financials, real estate, and fossil fuels protects capital.

2024 will be challenging but opportunistic. The difference between winners and losers will not be luck but the ability to identify where global capital is migrating.