“Our ‘Roaring 2020s’ scenario is looking not only possible, but also probable.”
Earlier this month, Barron’s highlighted the 2024 S&P 500
SPX
targets for six investment strategists including yours truly. Our target is the highest at 5400, based on projected S&P 500 earnings per share of $250 next year. Morgan Stanley’s Mike Wilson has the lowest numbers at 4500 for the index’s price target and $229 for earnings per share. In last year’s survey by Barron’s, we had 4800 as our S&P 500 target for 2023 with earnings at $225. The low comparable readings were 3930 and $199.
Along the way, we trimmed our 2023 year-end target to a more reasonable 4600. Then, on June 5, we wrote: “Is all the AI euphoria leading the stock market into another ‘MAMU’ — ‘Mother of All Meltups’? If so, our 4600 target for the S&P 500 by year-end might prove conservative, not controversial.” On July 19, we wrote: “The S&P 500 is now almost at 4600. It closed at 4556.27 on Tuesday. Rather than raise our year-end target, we are raising our expectations for what the bull market could deliver through the end of 2024 and beyond. We think that 5400 is achievable by the end of next year. If that happens, then 5800 would be our target for the end of 2025. In other words, we think that the bull market has staying power.” Last week, we raised our 2025 target for the S&P 500 price index to 6000, as our “Roaring 2020s” scenario is looking not only possible, but also probable. Now let’s review our talking points on behalf of the bullish team in the Great Debate. Here’s an even dozen: 1. Interest rates are back to normal: Perhaps the U.S. Federal Reserve hasn’t been tightening monetary policy so much as normalizing it. Interest rates are back to the Old Normal. They are back to where they were before the New Abnormal period between the Great Financial Crisis and the Great Virus Crisis, during which the Fed pegged interest rates near zero. The normalization theory implies that the Fed might not lower interest rates next year as much as widely expected. That’s because the U.S. economy wouldn’t require as much easing to reverse the tightening. If the economy remains resilient but inflation continues to fall closer to the Fed’s 2.0% target next year — both of which we’re expecting — then the Fed might lower the federal funds rate twice next year, by 25 basis points each time, instead of four times or more as widely anticipated. 2. Consumers have purchasing power: Many consumers may …
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“Our ‘Roaring 2020s’ scenario is looking not only possible, but also probable.”
Earlier this month, Barron’s highlighted the 2024 S&P 500
SPX
targets for six investment strategists including yours truly. Our target is the highest at 5400, based on projected S&P 500 earnings per share of $250 next year. Morgan Stanley’s Mike Wilson has the lowest numbers at 4500 for the index’s price target and $229 for earnings per share. In last year’s survey by Barron’s, we had 4800 as our S&P 500 target for 2023 with earnings at $225. The low comparable readings were 3930 and $199.
Along the way, we trimmed our 2023 year-end target to a more reasonable 4600. Then, on June 5, we wrote: “Is all the AI euphoria leading the stock market into another ‘MAMU’ — ‘Mother of All Meltups’? If so, our 4600 target for the S&P 500 by year-end might prove conservative, not controversial.” On July 19, we wrote: “The S&P 500 is now almost at 4600. It closed at 4556.27 on Tuesday. Rather than raise our year-end target, we are raising our expectations for what the bull market could deliver through the end of 2024 and beyond. We think that 5400 is achievable by the end of next year. If that happens, then 5800 would be our target for the end of 2025. In other words, we think that the bull market has staying power.” Last week, we raised our 2025 target for the S&P 500 price index to 6000, as our “Roaring 2020s” scenario is looking not only possible, but also probable. Now let’s review our talking points on behalf of the bullish team in the Great Debate. Here’s an even dozen: 1. Interest rates are back to normal: Perhaps the U.S. Federal Reserve hasn’t been tightening monetary policy so much as normalizing it. Interest rates are back to the Old Normal. They are back to where they were before the New Abnormal period between the Great Financial Crisis and the Great Virus Crisis, during which the Fed pegged interest rates near zero. The normalization theory implies that the Fed might not lower interest rates next year as much as widely expected. That’s because the U.S. economy wouldn’t require as much easing to reverse the tightening. If the economy remains resilient but inflation continues to fall closer to the Fed’s 2.0% target next year — both of which we’re expecting — then the Fed might lower the federal funds rate twice next year, by 25 basis points each time, instead of four times or more as widely anticipated. 2. Consumers have purchasing power: Many consumers may …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]