The S&P 500 index performed exceptionally well in 2023, recording an impressive gain of nearly 24% and reaching new all-time highs towards the end of the year. This surge was largely attributed to the Federal Reserve’s decision to lower interest rates, which fueled a rally in the final two months of the year.
However, experts on Wall Street are not particularly optimistic about the stock market’s performance in 2024. Many strategists are predicting limited upside and foresee the market experiencing minimal growth. In fact, the median target among 20 Wall Street strategists for the S&P 500 in 2024 is only 4,850, which is less than a 2% increase from its closing in 2023.
Despite the somewhat gloomy outlook, some firms, such as Goldman Sachs, have raised their targets for 2024 due to the recent surges in stock prices and a more dovish stance from the Federal Reserve. Goldman Sachs now projects a 2024 target of 5,100 for the S&P 500. On the other hand, Oppenheimer and Fundstrat are the most bullish, predicting a year-end target of 5,200.
There is significant divergence among different firms regarding their views on the economy in 2024, which ultimately influences the ongoing debate between bullish and bearish sentiments. While some firms dismiss the possibility of a pending recession, others see it as a potential threat that could negatively impact stock prices.
The notable performance of large technology stocks, often referred to as the “Magnificent Seven,” heavily contributed to the market’s gains in 2023. However, experts expect a more widespread market leadership in 2024. Small caps and financials, in particular, are anticipated to perform well, thanks to the declining interest rates and improving economic growth expectations.
Experts also anticipate that the performance of the “Magnificent Seven” stocks will vary significantly in 2024 due to unique company-specific factors. This anticipated variability adds to the overall uncertainty surrounding the outlook for stocks in the coming year.
Overall, the stock market’s performance in 2024 remains uncertain, with varying views on the economy and market leadership. Investors and analysts will closely monitor economic indicators and company fundamentals to gain a better understanding of the market’s trajectory in the year ahead.
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