As the clock ticks towards 2024, financial powerhouse Raymond James has forecasted a market tango, characterized by a shifting focus on defensive stocks in the first half before giving way to a surge in cyclicals in the latter half of the trading year.

Insights from the firm suggest the likely ebb and flow in the U.S. economy, foreseeing both headwinds and tailwinds in the near term. However, amid this period of fluctuation, Raymond James remains optimistic, projecting a smooth sailing for markets, eventually culminating in a rally toward cyclicals.

Raymond James presented a cautiously optimistic stance, articulating, “We still believe that a recession will start in the second quarter of 2024, but it will likely be the mildest ever. Indeed, it may be so mild that markets barely notice it.”

Accompanying their analysis, Raymond James also provided a chart to illustrate their insights.

Examining the performance over the past month of trading, Raymond James offered a comparison of the 11 S&P sectors, shedding light on their recent performances relative to each other.

• Health Care Select Sector SPDR Fund ETF (XLV) +6.5%.
• Financial Select Sector SPDR Fund ETF (NYSEARCA:XLF) +5.5%.
• Real Estate Select Sector SPDR Fund ETF (XLRE) +5.1%.
• Communication Services Select Sector SPDR Fund ETF (XLC) +4.4%.
• Materials Select Sector SPDR Fund ETF (XLB) +3.2%.
• Consumer Staples Select Sector SPDR Fund ETF (XLP) +3.1%.
• Industrial Select Sector SPDR Fund ETF (XLI) +2.9%.
• Utilities Select Sector SPDR Fund ETF (XLU) +2.7%.
• Energy Select Sector SPDR Fund ETF (NYSEARCA:XLE) +2%.
• Consumer Discretionary Select Sector SPDR Fund ETF (NYSEARCA:XLY) +1.9%.
• Technology Select Sector SPDR Fund ETF (NYSEARCA:XLK) +1.9%.