2024’s Not Even Here, And Wall Street’s Already Revising Its Stock Forecasts

2024’s Not Even Here, And Wall Street’s Already Revising Its Stock Forecasts
Reda Farran, CFA

3 months ago2 mins

Mentioned in story

In a move no one saw coming, the S&P 500 snapped a three-month losing streak in November to post its best month in almost a year and a half. Investors were happy to look past geopolitical turmoil, high borrowing costs, and the possibility of a recession to push the index to 4,568 last month, up 8.9% – for its second-best November since 1980, behind only the pandemic-era rebound in 2020. That surprise rally has Wall Street strategists scrambling to update their 2024 targets for the S&P 500, with some calling for new record highs and others warning about a nasty drop.

On one end, you have Bank of America, Deutsche Bank, and BMO Capital Markets among those who see the index hitting 5,000 or higher next year. (That’s above its all-time high – 4,819 – set on January 4th, 2022). On the other end, you have JPMorgan, which expects the index to drop to 4,200 by the end of 2024 – roughly 8% from its current level. The bank sees decelerating global growth, shrinking household savings, rising geopolitical tensions, and increasing political uncertainty from the US presidential election all taking a toll.

Altogether, the average 2024 target for all the strategists tracked by Bloomberg currently sits at 4,664, representing a measly 2% gain in the S&P 500. But take those forecasts with a big grain of salt, as Wall Street strategists get it wrong quite often. In fact, many were warning just 12 months ago that higher interest rates would trigger a recession and tank the stock market, only to be blindsided by this year’s ferocious rally.

But these wide-ranging predictions, if nothing else, are a cautionary tale about the perils of overconfidence in forecasting where this stock market might go. The S&P 500 is a dynamic and surprising beast. Tread lightly.

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