Here is what BlackRock wants out of 2024`

January 10, 2024 at 07:12 AM EST

Blackrock stock outlook

The new year is here, and all the major investment banks and asset managers have been excitingly putting out their macroeconomic projections for 2024. Whatever they advise their clients will likely be a step that you could - and probably should - consider for your portfolio moving forward.

Household name banks may be pushing out their own set of views, but what you really should focus on is those names that like to move in silence for the sake of their own assets - which tend to come from ultra-high net worth individuals -, banks like The Goldman Sachs Group (NYSE: GS) and asset management giants like BlackRock (NYSE: BLK).

You see, these two giants have already rolled out their own views for the coming year, and not surprisingly, these views are singing to a very similar tune. When it comes to banking stocks, when these two speak, the world tends to listen, and you just can't argue with their track records of success. So here it goes.

The bottom line

This is literally what BlackRock focuses on in its 2024 macro outlook report, which you can find here. Whether you'd like to digest all sixteen pages of valuable content or simply kick back and get the gist of what is going on today by sticking around, the choice is yours, and so is your portfolio's outcome.

The focus is on investors to grab the wheel in this divided economy. Most market sentiment is divided between a successful soft landing by the FED and a potential recession scenario. The truth is that you have to deal with conflicting data, which makes navigating markets challenging today.

You can start taking the wheel by following the trends in the two ISM PMI reports, which cover the manufacturing and services sectors of the United States economy. You'll quickly notice that manufacturing is fast asleep while services are adding jobs left and right, raising prices, and expanding corporate profits.

Knowing what you know now would make it easier to see why Goldman Sachs is hoping for a breakout in the manufacturing sector, allowing you to take advantage of several industry and stock-picking opportunities. The question really boils down to how best to approach this situation.

Well, in short, BlackRock suggests you should actively balance your portfolio instead of letting it run on auto-pilot. Why this is their view is up to speculation; however, it does make sense to remain nimble as FED rate cuts this 2024 spark a turnaround in manufacturing as well as a continuation in services expansion.

Big calls, bigger trends

Cool, now that you have a few pointers to mention at the next family or colleague gathering when economics pop up as a theme, it is time for you to get to the protein of BlackRock's recommendations. In the United States, the asset manager is bullish regarding real estate, technology, and financials.

Because BlackRock sees 'higher for longer' inflation themes domestically, they are betting that real estate stocks will likely do well. Warren Buffett has also been adding stocks like Pulte Group (NYSE: PHM) and D.R. Horton (NYSE: DHI) to his portfolio, betting on an expanding view on construction and housing activity.

Next, BlackRock has been suggesting a continuation in the artificial intelligence space, and while they didn't name any stocks, here's a good way to see what money likes in that space:

Filtering by forward price-to-earnings ratios, you can gauge how much the market is willing to pay today for the future earnings of specific stocks. Using this metric, you'll notice how SentinelOne (NYSE: S) and Cloudflare (NYSE: NET) are both trading at tremendous premiums to their technology sector peers.

There must be a good reason investors willingly pay above-average prices for these stocks and why BlackRock is bullish on a continued expansion in this new technology trend. Last but not least, BlackRock is advising investments in one of the first sectors that turn with a booming economy: financials.

So, look, there are two different schools of thought here. On one side, rate cuts could bring added financing activity in the consumer sector, such as credit cards and mortgages, particularly the latter now that you understand how Buffett likes the construction space for this year.

While banks like Bank of America (NYSE: BAC) and Citigroup (NYSE: C) will be the ones to see that wave of financing, it is investment banks like Goldman and Morgan Stanley (NYSE: MS) that are to receive increased trading and corporate financing fees, especially in the way BlackRock describes 2024 filled with volatile stock prices.

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Here is what BlackRock wants out of 2024`

The bottom line

Big calls, bigger trends

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