According to a CNBC survey, investor confidence in the Fed remains strong in 2024, leading to a rebound in bank stocks.

The Federal Reserve, led by Jerome Powell, is preferred by 300 investors, traders, and money managers in CNBC's Delivering Alpha Stock Survey poll for the year.

The Fed received an excellent or good score from 88% of respondents for 2023, which is higher than the 77% from the survey conducted three months ago. Over half of the respondents believe that the Fed will begin cutting rates in the second quarter of 2024.

Most of those surveyed plan to invest in the stock market, with 28% stating that the S&P 500 would be their primary target in the new year. Additionally, 16% said they would mostly be investing in Nasdaq 100 stocks.

In 2023, 12% of survey respondents predicted that China would have the strongest growth, followed by Japanese stocks, high yield bonds, long range US bonds, and bitcoin, all at 8% each. No one surveyed said gold would be their preferred investment of 2023, as it is currently near record highs and has increased by 15% in 2023.

In terms of sectors, 23% of respondents predicted that high dividend stocks would be the top performers in the new year, while 35% chose financials as the sector to watch.

Still love the Magnificent 7

In 2024, the "Magnificent 7" or the other 493 S&P stocks respondents were unanimously in favor of the "Magnificent 7," with 77% saying they would perform better cumulatively than the rest of the S&P 500. Of the tech basket, "Tesla" was the clear favorite, with 44% saying they would choose it first, followed by "Amazon" at 24% and "Nvidia" at 12%. "Alphabet," "Apple," and "Meta" were all in single digits.

According to a survey, 58% of investors prefer to invest in AI within the big cap tech industry.

The tech stocks that received the most support in the survey were Microsoft at 39%, Nvidia at 35%, AMD at 13%, and Amazon at 9%. However, Oracle, which was previously a popular AI play, had zero percent support in the survey. In recent months, analysts have become less bullish on Oracle, with only 14 out of 27 now having a buy rating on the stock, 12 are neutral, and one is a sell. Oracle's stock price has fallen 17% from its June high.

If the markets face difficulties, the majority of respondents (35%) believe that money markets are the safest option, followed by 31% in U.S. bonds and 19% in cash. Only 7% would opt for gold, 4% for crypto, and 4% for real estate.

In 2023, utilities were the worst-performing sector, down 11%, while health care had the most upside potential in 2024, with 56% of respondents saying it had the best chance of doing well. Energy stocks were favored by 24%, consumer staples by 12%, and utilities by 8%.

In 2024, the biggest risks for stocks are stubborn inflation, issues with commercial real estate, and slow growth, with war overseas and a more militarily aggressive China scoring 11% each.

In the 2024 election, only 15% of investors said it would significantly influence their investment strategy, while 85% reported that it would have little impact on their decision-making process.