Looking ahead to 2024: U.S. stock market leadership | Wilnesh News

Americans, especially those who live abroad, are often accused of having a rather narrow view of the world.

Americans’ preference for the United States also extends to investment home bias and a reluctance to snap up foreign investment.

While many experts say to diversify away from the United States, Wall Street has been the top place for traders and investors for several years.

this S&P 500 Index will grow by nearly 18% by 2024, while Nasdaq Index It rose 22% over the same period.

Few other major markets come close to this level.

Japan is one of the exceptions after three decades of apparent underperformance. this Nikkei 225 So far in 2024, the index is up 23%.

Considerable gains have also been made Argentina and Turkey, but both countries have suffered from surging inflation and currency fluctuations, making investments less attractive than their year-to-date returns would suggest.

Then there’s China. this Shanghai Composite Index Stocks have fallen this year despite repeated bullish calls from international strategists.

But bulls are stuck in a China shop with myriad economic problems, from a still volatile housing market to weak domestic consumption to political and economic policies that have led China’s trading partners to impose tariffs on their exports.

Indeed, China is take the lead Production of electric cars and solar panels, and exports are indeed growing even with tariffs on Chinese goods.

But President Xi Jinping’s political model of “ruling the rich with the party” continues to dampen the enthusiasm of foreign investors and domestic consumers.

Of course, the United States has its own problems.

This is an unprecedented U.S. presidential election, involving too many ways to mention in a commentary on trade and investment.

But our economy is not only rock solid, it’s the envy of the world.

Although the U.S. economy appears to be slowing and unemployment is rising slightly, inflation continues to decline. All of these are factors that could lead to lower interest rates.

A rate cut could extend the stock market’s rally and boost the economic recovery.

That could all change depending on the policies of the next presidential administration and the makeup of Congress in 2025.

But we won’t know what happens next in the United States until Election Day, November 5.

The size of our nation’s deficit and debt is truly unsustainable.

But bond market investors are not yet shrugging, knowing that China, Japan, Italy, Spain and other countries have worse fiscal problems than the United States

The ratio of China’s total debt to GDP in 2023 is Estimated to be 288%According to the National Institute of Finance and Development. Compared with the proportion of the United States 123% By 2023, Japan’s debt-to-GDP ratio will be 255% By 2024, according to the International Monetary Fund.

Overseas investors continue to purchase U.S. bonds because of this disparity, not to mention the substantial yields offered by Treasuries and the potential for capital gains if interest rates fall significantly. In fact, as interest rates fall, bond prices rise, providing the opportunity for capital appreciation.

Additionally, the U.S. dollar’s ​​continued strength has kept it stable even amid concerns that the U.S. dollar may be supplanted as the world’s currency.

All the concerns so far about America’s place in the world, whether raised by outsiders or some at home, will cost investors money if they heed calls of impending doom.

Financial markets are giving no indication that the United States is in recession—far from it.

Perhaps one day this will become a reality and other economies and markets may become more attractive, but that day has not yet come.

For those who continue to push U.S. investors to diversify into global markets, whether developed or emerging, it would be good to remember the timeless words of Kansas’ Dorothy Gale : “There’s no place like home.”

— CNBC contributor Ron Insana Yes iFi.AI, an artificial intelligence financial technology company.