Another Wall Street strategist predicts that the S&P 500 index will reach a historic high in 2024. It is reported that he accurately predicted the rise of the US stock market this year.
John Stoltzfus, Chief Investment Strategist at Oppenheimer Asset Management, a veteran US asset management firm, predicts that the S&P 500 index will close at 5200 points next year, equaling Fundstrat's Tom Lee and becoming one of the highest targets currently set by Wall Street.
This prediction means that the average level of the index next year will rise by about 13% compared to Monday's closing.
A transitional year
The strategist wrote in a report on Monday, "We expect 2024 to be a transitional year, and the market will experience the process we expect the Federal Reserve to shift from a restrictive monetary policy environment to a more accommodative one."
He said that "resilience" will once again become the keyword for 2024. Stoltzfus believes that despite a slowdown in economic growth, it will not turn into negative growth, and he believes that interest rate cuts will bring comfort to the market in the second half of next year.
At the same time, the positive trend of profits in the past two quarters has convinced Stoltzfus that the performance of listed companies can also maintain a positive trend in 2024. He predicts that by 2024, the company's profits will grow by 9%, reaching $240 per share.
"Out of 11 industries, 8 showed positive profit growth, with four industries including communication services, information technology, non essential consumer goods, and finance achieving double-digit profit growth," he said. "This is remarkable."
He believes that many 2023 "leaders" will also lead again in 2024. Oppenheimer has rated information technology stocks, non essential consumer goods stocks, and industrial stocks as overweight until 2024.
Since 2023, the technology industry has been the sector with the largest increase, with a growth rate of 50%, while the non essential consumer goods industry ranks third with a growth rate of 34.1%.
Maintain a cautious attitude towards interest rate cuts
Finally, it is worth noting that Stoltzfus believes that recent market predictions that the Federal Reserve will cut interest rates as early as March are "overly optimistic". Although the Federal Reserve hopes to avoid an economic recession, he believes that its measures to ensure a sustained downward trend in inflation will be cautious.
He expects the Federal Reserve to cut interest rates in the second half of next year, and if inflation becomes more sticky, it may even cut rates in the fourth quarter.
He said, "We are no longer in a crisis. This does not mean that once we are in a crisis, or if the Federal Reserve feels the economy is in recession, they will not cut interest rates. They are likely to cut interest rates."
"But we believe that this is not the case. We believe that consumers and businesses still maintain significant resilience. Despite the decline in employment, the labor market remains resilient," he added.