Bloomberg News reports that as the strategists on Wall Street are calling for an all-time high as far as US stocks are concerned, shortly, it is not the same as JPMorgan Chase & Co. is thinking. This has caused it to release one of the grimiest predictions among its peers so far.
More about the S&P 500 Index
The S&P 500 index is expected to plunge to 4200 by the end of 2024. This figure is approximately 8% lower than its current level. It reflects the decelerating global growth, which has also caused a shrinking of household savings.
The geopolitical risks remain high with the national elections, including the ones in the US, which could further add to the policy volatility. Dubravko Lakos-Bujas, the chief global equity strategist of the bank, revealed the same.
The bank’s call reiterates the outlook heading into the year, which has fallen short. Amid economic resilience, US stocks are heading towards a double-digit annual gain.
As stated by Lakos-Bujas in a note to client Wednesday, it is expected that with US Federal Reserve easing, a greater macro challenging environment for stocks is anticipated for next year since there is a softening of the consumer trends just at a time when the investor sentiment and positioning has reversed generally.
JPMorgan’s Views
Bloomberg News reports that JPMorgan’s view differs from the majority of Wall Street. Binky Chadha at Deutsche Bank AG and Savita Subramaniam of Bank of America are among those who see the index reaching the 5000 mark and higher next year. On the other hand, David Kostin of Goldman Sachs Group Inc. believes that the benchmark for US stocks will be close to the earlier peak.
Mike Wilson of Morgan Stanley, an ardent equity bear, is more constructive on equities. He has predicted that the S&P 500 Index will close at 4500. However, as tracked by Bloomberg, JPMorgan’s call is the lowest, with an average of 4664.
The S&P 500 has soared about 19% in the current year due to dropping inflation, strong economic data, and the opinion that Fed officials are approaching an end to their blitz of hiking rates. Retrieving corporate profits and the frenzy caused by artificial intelligence have buoyed technology shares. The gains in the stocks also proved to be uplifting for investors across 2023.
According to the bank, the consensus estimates imply a steep reacceleration in growth, which is constant with an early cycle recovery. This is lofty against a potential prospect of a higher-for-longer rate regime.
Even with the bank clinging to the dour outlook, earnings growth might be 2% -3 % yearly. The earnings-per-share target is US$225 for the year 2024.
