CNBC's Jim Cramer shared his market predictions for 2024 on Tuesday, but also warned that the first days of the new year often don't reveal much about the future.
He suggested that there may now be a “sector rotation” on Wall Street“ With some investors doubting that Magnificent Seven tech stocks will continue their rally, they are instead buying up stocks that have seen sharp declines, such as food and pharmaceutical stocks.
“My crystal ball is that people will take profits on the best of the best, the ones that defined this market, yes, the Magnificent Seven and their friends, as well as the esteemed names of software companies,” Cramer said. “I think investors will use this money to invest in companies that haven't had any respect in ages.”
Many of these “repositionings” begin many years ago, Cramer said, but the changes could be temporary. Investors could start buying back stocks that performed well in December, albeit at lower levels, once companies start reporting earnings, he added.
For Cramer, much of what's happening on Wall Street will revolve around the Federal Reserve's decisions, with many trying to predict and then second-guess the organization's moves while simultaneously fearing a recession. Rather than getting too caught up in the Fed's concerns, investors would be wise to choose stocks of companies that they believe have solid leadership and are reasonably valued – not dramatically higher than the average stock in the S&P 500.
“So wait patiently for the sell-off that I expect and then shop,” Cramer said.