CNBC's Jim Cramer on Tuesday shared his market forecast for 2024, but also warned that the first days of the new year often don't tell much about the future.
He noted that Wall Street may now be seeing a “sector rotation.”“ Some investors doubt that Magnificent Seven technology shares will continue their trend, and instead buy stocks that have seen sharp declines such as food or pharmaceutical names.
“According to my crystal ball, people would be taking profits from the best of the best, the ones that have defined this market, yes, the Seven Wonders and Friends, as well as the names of the most valuable software companies,” Cramer said. “I think investors will use that money to invest in companies that haven't gotten any respect for ages.”
A lot of this “repositioning” begins several years ago, but the moves could be temporary, Cramer said. He added that investors may start buying back stocks that performed well in December, albeit at lower levels, once companies start reporting earnings.
For Cramer, much of the action on Wall Street will revolve around the Fed's decisions, as many try to predict and then scrutinize the organization's moves, fearing a recession. Instead of getting caught up in the Fed's concerns, he said investors would be wise to pick stocks of companies they believe have strong leadership and are reasonably valued — not significantly higher than the average stocks in the S&P 500.
“So, wait patiently for the sell-off I expect and then do some buying,” Cramer said.
“Infuriatingly humble alcohol fanatic. Unapologetic beer practitioner. Analyst.”