Bank of America’s equity strategy team envisions a bullish trajectory for the S&P 500, forecasting a record-breaking ascent to 5,000 in 2024. The stock market, having already experienced a remarkable performance in 2023, is poised for another robust year according to the insights shared by Savita Subramanian and her team in a note to clients published on Tuesday.
The bank’s equity strategists argue that the upcoming year will be a “stock picker’s paradise,” characterized by a shift past the “maximum macro uncertainty” that investors navigated in the preceding year. Despite existing macro signals appearing muddled, the team notes an increase in idiosyncratic alpha, emphasizing a positive outlook as markets have absorbed significant geopolitical shocks.
“The market has absorbed significant geopolitical shocks already, and the good news is we’re talking about the bad news,” the note stated.
Bank of America’s optimism is grounded in the belief that the market has successfully adapted to higher rates and inflation, showcasing resilience in the face of evolving economic conditions. The team is bullish not due to an expectation of Federal Reserve rate cuts but rather as a result of acknowledging the accomplishments of the Fed.
The forecasted year-end target for the S&P 500 implies a potential 10% increase from current levels, signifying the bank’s confidence in the market’s upward trajectory. Notably, Bank of America had set a year-end price target of 4,600 for the S&P 500 in 2023, suggesting a robust and optimistic outlook for the coming year.
