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S&P 500 (SPX) forecast 2024: $Goldman Sachs(GS)$ , $JPMorgan Chase(JPM)$ , $Deutsche Bank AG(DB)$…

After a slump in 2022, the US stock market has soared in 2023, with the $S&P 500(.SPX)$ and $NASDAQ 100(NDX)$ rising more than 20% and 50%, respectively.

The driving forces for the stock market's strong performance this year include the economy's resilience, the decline in inflation, and the expectation of interest rate peaking.

However, big question for investors now is whether the strong upward trend in the stock market will continue into 2024, or if the economy will start to slow down and drag the stock market down.

Here are the 2024 US stock market predictions from Wall Street banks, and they offer their views on the economic outlook.

Which institution do you trust to be more accurate in its predictions for 2024? Leave a comment in the comments section.

1.$JPMorgan Chase(JPM)$ : Bullish, $S&P 500(.SPX)$ target of 4,200

JPMorgan Chase said high valuations, high interest rates, weakening consumption, increasing geopolitical risks, and the possibility of an economic recession make it difficult for them to be bullish on the stock market in 2024.

"We expect a more challenging macro landscape for equities next year, with weakening consumption trends, a reversal of investor positioning and sentiment," Marko Kolanovic and Dubravko Lakos-Bujas, the strategists at JPMorgan Chase, said in their 2024 outlook report.

JPMorgan Chase also said: "Equity markets are now highly valued, volatility is near historic lows, and geopolitical and political risks remain at elevated levels. We expect global earnings growth to be weak, and equity markets to fall from current levels."

2. $Goldman Sachs(GS)$ : Neutral, $S&P 500(.SPX)$ target of 4,700

Goldman Sachs predicted a small increase in the S&P 500 index in 2024, saying that the stock market has been stuck in a "fat and flat" range since 2022.

 "Higher interest rates over the longer term are unlikely to support earnings expansion, and our market view is broadly consistent with earnings growth. On a weighted basis, we expect the price-to-earnings multiple for global equities to be around 8% with total returns of around 10% next year. This suggests that equities are likely to trade towards the upper end of the range they have been stuck in since 2022," Goldman Sachs said.

Goldman Sachs also said, "Unless there is a recession, we do not expect a significant decline in earnings. However, the lack of high growth and high starting valuations (especially in the US), as well as low equity risk premiums, make the risk-adjusted return profile of equities less attractive compared to cash."

3.$ROYAL BK CDA(RBCPF)$ : Bullish, $S&P 500(.SPX)$ target of 5,000

Royal Bank of Canada's 2024 outlook report said that the stock market's 9% increase in November may already reflect some of the potential gains for 2024, but there is still room for further gains in the future. 

The main driver is expected to be the continued decline in inflation. Royal Bank of Canada said that their valuation model shows that a sustained decline in inflation would push up multiples, similar to the 1970s.

Additionally, the bank said that while there may be some uncertainty around the 2024 presidential election, the $S&P 500(.SPX)$ has averaged a 7.5% increase in presidential election years.

4.$Deutsche Bank AG(DB)$ : Bullish, $S&P 500(.SPX)$ target of 5,100

Deutsche Bank's 2024 stock market outlook report pointed out that a combination of falling inflation and still-strong GDP growth in the US will result in a "soft landing" for the economy, which will be positive for the stock market.

Even if there is a recession next year, it is unlikely to significantly impact the stock market because most investors are already bracing for it. The bank predicted that the $S&P 500(.SPX)$ will increase by approximately 10% to 5100 in 2024, doubling that gain to about 19% if there is no recession.

5.Fundstrat: Bullish, $S&P 500(.SPX)$ target of 5,200

Fundstrat's Tom Lee is once again the most bullish strategist on Wall Street. According to his forecast, most of the stock market rally in 2024 will occur in the second half of the year, because the Federal Reserve will shift from the "inflation war" to "business cycle management," which means that interest rates are more likely to be cut next year.

Additionally, he believed that the US economy is solid and that the backlog of demand suggests that we are earlier in the cycle rather than later. If this is true, then earnings should remain strong and consumer spending should remain solid, both of which will support further stock market gains. He predicted that US equities will outperform expectations in 2024 with yields between 12% and 15%.

6.Yardeni Research: Bullish, $S&P 500(.SPX)$ target of 5,400

Market veteran Ed Yardeni expected the S&P 500 to surge 17% in 2024, based on a strengthening economy, falling inflation and accelerating productivity gains. He based his forecast on a price-to-earnings multiple of about 20 for the S&P 500, which is currently trading at about 19.

Yardeni's prediction is also in line with his "roaring 2020" thesis, in which he expects advances in artificial intelligence (AI) and robotics to boost companies' efficiency and profits.

Disclaimer：The above content is compiled from public information, and the views are not intended as direct investment advice.