After a strong 2023, let’s dive into what 2024 might hold for the S&P 500. Predictions are all over the place, ranging from 4,200 to 5,500. But remember, a lot can change in a year. Economic data and corporate events will keep Wall Street analysts on their toes, constantly adjusting their forecasts.
Before we get into 2024, let’s take a quick look back at 2023. Some firms hit the mark with their predictions, while others were way off. If you’re feeling optimistic about 2024, consider investing in private growth companies that took a hit since 2022. With a more risk-friendly environment, these companies could see a resurgence.
In 2023, some firms missed the mark with their S&P 500 predictions. Barclays, Société Generale, Morgan Stanley, UBS, Citi, Blackrock, Bank of America, and Goldman Sachs all underestimated the S&P 500’s performance. Mike Wilson, a Wall Street strategist, was particularly bearish, predicting a drop to 3,200 before ending at 3,900. Despite being off, he’s likely to get a nice bonus due to the publicity he gained.
On the other hand, Oppenheimer, Deutsche Bank, Fundstrat, and Yardeni Research were closer to the mark with their 2023 forecasts. JP Morgan, Jefferies, Wells Fargo, RBC Capital Markets, BMO, and Nuveen were also in the ballpark. Kudos to these firms, and hopefully, they’ll see some hefty year-end bonuses!
As for the S&P 500 in 2024, the average Wall Street forecast is 4,861. Given the strong rally at the end of 2023, there might not be much room left for growth. The most bearish forecast comes from JPMorgan, predicting a drop to 4,200 due to slowing economic growth and tightening credit. On the other hand, the most bullish forecast comes from Capital Economics, predicting a rise to 5,500, largely due to enthusiasm about AI technology.
Personally, I’m feeling positive about the stock market in 2024. I believe the Fed will start cutting rates by mid-2024, making borrowing cheaper. Lower rates make risk assets more attractive, and I don’t see inflation making a big comeback like in the 1970s. I also expect any recession to be mild and not cause a significant increase in unemployment. With these factors in mind, my year-end 2024 S&P 500 price target is 4,869.
However, if the Fed delays rate cuts and inflation doesn’t decrease as expected, the S&P 500 could drop to 4,200. On the flip side, if the Fed acts sooner, we could see a return of investment mania in small caps, meme stocks, and startup valuations, pushing the S&P 500 to a high of 5,243.
In conclusion, I think 2024 will be a decent year for stocks, real estate, and other risk assets. I don’t expect another bear market, but I also don’t see another 20% gain in stocks. I plan to max out my tax-advantaged retirement accounts, contribute to my kids’ 529 plans, and continue to diversify into private tech companies. No matter what Wall Street predicts, I’ll always take full advantage of tax-advantaged accounts, and I encourage you to do the same.
I’d love to hear your forecast for the S&P 500 in 2024. I’ll be updating this post every quarter based on new data. Stay tuned!
