_{When I see bad days like Friday for stocks and our portfolios, I know it’s my job to share with you the views of the professional share players, such as fund managers. Recently, the AFR has been surveying the professionals and despite recent down days and talks of an overdue pullback, the overall view is consistent with mine, that being long stocks makes sense for 2024.}

 _{I’ll admit I’ve been telling my financial planning clients that I could think about being more defensive with their portfolios from around March next year. That will depend on how many rate cuts we see, the slowdown of the economy and the surge in stocks that I expect this year, which should roll into the early months of 2025. These must-watch issues apply equally to the local and US economies and markets.}

_{In the AFR, Joanne Tran talked with UBS equity strategist Richard Schellbach, who’d lifted his year-end target to 8000 for the S&P/ASX 200 after forecasting 7660 in November.}

_{But wait, there are more optimists out there for stocks, with fund manager VanEck looking for 8300 by year’s end, while the usually very cautious David Bassanese, chief economist at Betashares, has moved his top target for the index to 8250.}

_{Let’s look at the chart of the index to see what 8300 might mean for overall returns.}

 _{S&P/ASX 200 Index}

_{As of Friday, the index was at 7727.60. If the team at VanEck is on the money that would be a 7.4% gain, and if you throw in say a 4% dividend and 1.5% for franking credits, you’d expect about a 13% gain from simply playing an ETF for the index. That’s not a bad return for simply backing and playing Australia’s best 300 listed companies.}

_{But you have to ask this question: are there signs that make it easy for us to buy this rising stock market scenario that could go as high as 8300 for the market index or even higher?}

_{Once again, in its Chanticleer column, the AFR delivered with a story headlined: “Nine signs there’s a ‘mini melt-up’ on the ASX – and 12 stocks to buy…”}

_{The columnist James Thomson referred to Morgan Stanley’s US strategist Michael Wilson, CIO and Chair of the Global Investment Committee for the investment bank. who’d been suspicious of the recent rally of stocks. He had a target for the S&P 500 of a low 4500. But as the index is now at 5304.72, he has raised his call to 5400.}

_{It’s not a big cave-in to optimism but he did concede the following: “It doesn’t matter what we think, but it’s what the market thinks, and it’s clear that last week’s data has given the markets more confidence in the soft landing/Goldilocks outcome.”}

_{Schellbach is in the camp that says Wall Street will grind higher and that will help our market head up as well. He also says we could see a “mini-melt-up” here and finds 9 signs that support his optimism. Here they are:}

1. _{Valuations might be historically high, but these measures often are ignored in a market melt-up.}
2. _{The market is rallying despite weakening earnings outlooks, with the likes of over-priced banks being chased by investors.}
3. _{Stocks keep rising despite questionable macroeconomic headwinds, such as sticky inflation and a slowing economy.}
4. _{Interest rate cuts are expected, which will help market liquidity.}
5. _{There’s still a lot of cash on the sidelines that should head to stocks as rate cuts start.}
6. _{There are signs of an uptick in the fear of missing out (FOMO) trend, which is good for stock-buying and share prices.}
7. _{The artificial intelligence (AI) drive will affect the views of companies on their potential and shareholders will be looking for opportunities with the stocks of those companies.}
8. _{Baby boomer spending is set to be a “this time it’s different” situation, which will be a plus for the economy and stocks.}
9. _{Governments are of the mind nowadays to fight recession threats.}

_{These all add in nicely to my five big reasons why I expect stocks to keep rising over 2024 and, at least, into the first half of 2025. Here they are:}

1. _{Interest rates will eventually be cut in 2024.}
2. _{Rate cuts historically are good for stocks.}
3. _{A recession looks unlikely in 2024 or early 2025.}
4. _{China is throwing US$42 billion at its property problems, as the economy is showing signs of coming back.}
5. _{The Presidential election year historically is the second best for the stock market.}

_{Thomson finished off giving a leg up for 12 stocks, which he gleaned from well-known fund managers. I’ll give you the views of analysts on these stocks from FNArena’s surveys.}

_{Company                                                                                          Consensus view of analysts}

1. _{Dexus (DXS)                                                                                          +26.6%}
2. _{GPT (GPT)                                                                                             +16.4%}
3. _{Reliance Worldwide (RWC)                                                              +14.2%}
4. _{Computershare (CPU)                                                                       +8.5%}
5. _{Hansen Technologies (HSN)                                                           +44.9%}
6. _{Metcash (MTS)                                                                                   +11.3%}
7. _{National Storage (NTS)                                                                    +8.5%}
8. _{GQG (GQG)                                                                                        +8.8%}
9. _{Pinnacle (PIN)                                                                                   +1.0%}
10. _{Brambles (BXB)                                                                                +13.2%}
11. _{Worley (WOR)                                                                                  +21.8%}
12. _{HMC Capital (HMC)                                                                        +2.1%}

_{Clearly, there’ll be sell-offs or pullbacks. But given this longer view on rising markets, these bad days for stock markets should prove to be buying opportunities. By the way, the next big data drop for Wall Street comes on Friday, when the Fed gets to see its favourite inflation reading called the PCE or the Personal Consumption Expenditures index.}

_{A lower-than-expected number would make market players anticipate rate cuts could come sooner than is currently being tipped by economists and vice versa.}

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.