Bank of America's Savita Subramanian projected the S&P 500 to peak at 5,000 in 2024, marking one of the most upbeat forecasts.
Bank of America (BofA) strategist Savita Subramanian and her team of analysts said the S&P 500 could surge as high as 5,000 in 2024, citing easing macro uncertainty, among other things. However, most analysts on Wall Street continue to take a significantly more cautious stance.
BofA’s Bull Case for S&P 500
The S&P 500 has been on a tear recently, surging to the highest level in more than three months amid easing macroeconomic headwinds.
However, there may be room for more upside. At least, that’s what Bank of America’s Savita Subramanian believes. Notably, the equity and quantitative strategist delivered a bold forecast for the broader stock market index, expecting it to print an all-time high of 5,000 in 2024.
As for the basis for its projection, one of the most upbeat ones for the next year, Subramanian and her team of analysts said investors are now “past the maximum macro uncertainty” and multiple geopolitical shocks. Another piece of “good news is [that] we are talking about the bad news,” they wrote:
“We’re not bullish because we expect the Fed to cut, but because of what the Fed has accomplished. Companies have adapted (as they are wont to do) to higher rates and inflation.”
– said the analysts.
While some may see her bull case as overstated, investors may be willing to listen to Subramanian’s prediction because the analyst has already won their trust this year. Notably, her 2023 projection of 4,600 for the S&P 500 is looking more and more likely, in contrast to most of her cautious Wall Street rivals.
Others on Wall Street Disagree and Argue for a Bear Case
Even her colleagues at Bank of America are not bullish on the stock market’s future prospects. The bank’s strategist Michael Hartnett recently warned of investors flocking into stocks as they grow increasingly confident of the Federal Reserve’s dovish pivot and a soft landing for the US economy.
Hartnett cautioned that the 10-year Treasury yield could continue to be a headwind for stocks in 2024, saying a potential drop to the 3% – 4% range would lead to increased recession talks and a bearish risk for the markets.
And he is not alone in his circumspect approach. Big money managers believe that the recent rally in equities is more of a year-end rebound than a turning point, adding that next year’s presidential election, fiscal and monetary policies, and recession fears could bring trouble.
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