As we approach a stellar 2023 for U.S. stocks, the S&P 500 and Nasdaq 100 have seen incredible surges of over 20% and 50%, respectively.
Needless to say, the investment community is full of expectations and speculation about the trajectory of the market in 2024. It’s really anyone’s guess for individual investors at this point. But Wall Street doesn’t really like speculation. From pessimism, neutrality, and downright optimism, we took a deep dive into each individual report to find out what they think will happen next year.
Here we provide a comprehensive analysis of these predictions. We hope this helps you create a nuanced investment compass for 2024.
BCA Study:
BCAResearch put on its pessimist hat and predicted a potentially severe downturn for the S&P 500, similar to the 2008 financial crisis. They argue that developed markets will be on the brink of recession unless monetary policy is significantly eased. According to BCAResearch, the S&P 500 could rise between 3,300 and 3,700 points if the Federal Reserve does not begin aggressive rate cuts.
JPMorgan:
JPMorgan joins the bearish chorus, citing factors such as overvalued stocks, rising interest rates, consumer lethargy, geopolitical tensions and the specter of a looming recession. Their crystal ball predicts a decline in US stocks, with a target of 4200 points for the S&P 500.
Morgan Stanley:
Morgan Stanley takes a neutral stance, expecting stable performance for the S&P 500 in 2024. They suggest that big tech companies may initially take the lead, but their dominance could fade. Investors should reduce exposure to high-flying technology stocks and shift toward defensive growth sectors such as healthcare, utilities and consumer staples.
Goldman Sachs:
Goldman Sachs also adopted a neutral outlook and expects the S&P 500 to close at 4,700 points, a slight increase. They argue that despite stable corporate profits, slowing profit growth, high valuations and low equity risk premiums could cause the party to stagnate.
Bank of America:
Bank of America painted a rosy picture, optimistically assessing the Federal Reserve’s significant progress on tightening monetary policy. They expect 2024 to be a prosperous year for U.S. stocks, with the current rate hike cycle completing and markets digesting geopolitical shocks.
Royal Bank of Canada:
Royal Bank of Canada predicts upward momentum, pointing to a continued decline in inflation as a driver for U.S. stocks in 2024. They remain positive despite the November surge and expect continued declines in inflation to support equity returns. Historical trends during presidential elections lend support to their optimistic outlook.
UBS, Deutsche Bank, Bank of Montreal:
UBS, Deutsche Bank and Bank of Montreal also joined the optimistic trend, each citing completed interest rate increases, slowing inflation and stable corporate profits as pillars supporting their positive outlook. Forecasts range from a 10% rise in the S&P 500-5100 points (Deutsche Bank) to a second year of bull market despite a potential recession (Bank of Montreal).
Amid a sea of uncertainty surrounding the U.S. stock market in 2024, the diverse opinions on Wall Street offer little guidance to investors in a volatile market. Amid these turbulent times, the 4e platform has emerged as a haven for those looking for a reliable and safe platform to dip their toes into US stock and index trading.
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That means whether you’re eyeing individual stocks like Tesla, Apple, and NVIDIA or broader indices, investors are encouraged to research their risk tolerance and investment objectives. Creating a customized investment plan tailored to your individual risk appetite is the key to navigating the turbulent landscape of the U.S. stock market in 2024.