Strategists at Bank of America said in a note they see the S&P 500 closing 2024 at 5,000, according to multiple outlets—a record high and a sign of confidence in the economy at large during a time when other strategists aren’t quite as bullish, but still optimistic.
The strategist team, led by Savita Subramanian, is optimistic about U.S. equities next year because of “what the Fed has accomplished” and the fact that the market has “absorbed significant geopolitical shocks already,” Bloomberg reported.
The strategists reportedly explained that U.S. companies have adapted to the higher interest rates imposed by the Federal Reserve and applauded the work of the central bank, which started embarking on an aggressive rate-hiking campaign last year to tame inflation.
The Bank of America strategists said they believe “US exceptionalism is intact” and predict 2024 will be “a stock picker’s paradise,” according to reports.
The S&P 500 is just above 4,500, about 5.5% below its all-time peak of 4,797 in January 2022. However, the index fund, which is often used as a barometer for the stock market and economy at large, has been doing extremely well lately. It is up almost 19% in 2023 so far and recorded an eight-day winning streak earlier this month in which it rose every day.
Other top strategists are also optimistic about the S&P 500 and the stock market in general next year, but don’t predict the same record highs. In a note last week, Goldman Sachs strategists forecasted the S&P 500 to rise to 4,700 by the end of 2024, a 4% increase over the current level. The Wells Fargo Investment Institute and UBS Global Wealth Management also made fairly modest growth predictions, as Wells Fargo estimated a 4,600 to 4,800 target and UBS estimated a 4,700 target, a 1%-6% and 4% increase respectively. However, Morgan Stanley’s Michael Wilson—who is known to be cautious—projected the S&P 500 would stay at 4,500 at the end of 2024. The S&P 500 has a typical annual return of 10%.
Here’s Where Wall Street Says S&P 500 Will Head Next Year (Don’t Expect Record Highs) (Forbes)
Wall Street Celebrates Strong Inflation Report: Dow, S&P 500 Surge To 2-Month Highs (Forbes)
Federal Reserve ‘Won’t Hesitate’ To Raise Rates Again If Necessary, Powell Says (Forbes)
Bank of America Sees S&P 500 Hitting Record 5,000 Next Year (Bloomberg)
Bank of America sees the S&P 500 rising to 5,000 next year, anticipates a ‘stock picker’s paradise’ (CNBC)