Happy New Year! We hope that you had a wonderful holiday season, and we wish you a prosperous and healthy 2024!

A year ago, Wall Street's forecast painted a bleak picture, foreseeing a prolonged bear market into 2023, with an average price target of -2.4%. Concerns loomed large over high inflation and anticipated tightening monetary policies that could trigger a recession that year. It marked the first time since 1999 that Wall Street had predicted a downturn for stocks.

However, the consensus proved remarkably wide of the mark, as the US economy exhibited exceptional resilience. The S&P 500 defied expectations, closing the year with a surge of 26.3% at 4,769, significantly surpassing Deutsche Bank's most optimistic target of 4,500.

Looking ahead, the predictions for the upcoming year are notably diverse. Yardeni Research stands as the most bullish, forecasting another double-digit increase, while JP Morgan adopts a considerably bearish stance, projecting nearly a 12% decline. On average, the street anticipates a marginal gain of +3.8% for the S&P, reaching 4,950.

Predictions for 2024

After looking at all the Wall Street reports, here are the targets from Wall Street's top strategists.

The chart above shows the most up-to-date price targets and potential upside/downside percentage changes from the S&P closing price on December 31, 2023.

The Bull: Yardeni Research

Market veteran Ed Yardeni emerges as the most optimistic voice, setting a target of 5,400 for the S&P 500. Yardeni foresees a resilient economy, moderated inflation, and an upsurge in productivity. His thesis paints a picture of the “Roaring 2020s,” driven by advancements in artificial intelligence and robotics, poised to enhance companies' efficiency and profitability.

The Bear: JP Morgan

Conversely, JP Morgan adopts the most pessimistic stance, projecting a price target of 4,200, reflecting an -11.9% decline. This stands as the most bearish forecast seen from a sell-side research firm, marking the first time a double-digit negative return target has been witnessed. It's unusual for Wall Street to endorse negative forecasts, because it's bad for business.

“In our 2024 outlook note, we anticipate a more challenging macro backdrop for stocks next year, with softening consumer trends coinciding with investor sentiment and positioning largely reversing,” stated JPMorgan's Marko Kolanovic and Dubravko Lakos-Bujas.

Their outlook identifies risks posed by elevated equity valuations, soaring interest rates, a weakening consumer landscape, escalating geopolitical tensions, and the looming specter of a potential recession.

The upcoming year promises to be intriguing, marked by a pivotal Presidential election, heightened consumer credit concerns, and various potential challenges. Will the S&P be resilient amidst these risks once more? For those keen on insights from the Runnymede investment team, our quarterly client conference call is scheduled for next week. Simply reply to this message if you'd like a replay, and we'll promptly send it to you post-broadcast.

All the best in 2024!

What do you think will happen in 2024? Are you a bull or a bear for the New Year?

“bull market” by mikecohen1872 is licensed under CC BY 2.0

By Chris Wang