Forget September Slump! S&P 500 Could Scale New Highs By Mid-2024, Predicts JPMorgan Strategist

The stock market faced significant setbacks in September, with the S&P 500 Index, a broader performance indicator, retreating to levels not seen since early June. Despite this, a market strategist remains optimistic about the medium-term outlook.

What Happened: According to A.J. Oden, the global investment strategist at JPMorgan Wealth Management, the S&P 500 Index is likely to reach new highs by mid-2024. 

Oden expressed this viewpoint during a CNBC interview, presenting it as a base-case scenario characterized by a soft landing. He believes that at some point, the Federal Reserve will pivot, leading to a market rally.

Oden also highlighted recent positive earnings revisions and suggested that the consumer discretionary sector could perform well as the Fed shifts its stance. In both soft landing and “softish landing” scenarios, the S&P 500 is expected to continue its upward trajectory.

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While concerns about a potential economic contraction persist, which could impact earnings, Oden said: “But right now, I feel like you know the data is telling us soft-landing is very much in play, and from there you should start to see higher levels or at least us being able to reach all-time highs again on the SP 500.”

Stock Valuations: Oden acknowledged that stocks are not inexpensive, but he pointed out that excluding the “Magnificent Seven,” a reference to seven mega-cap U.S. companies — Nvidia Corp. NVDA, Apple, Inc. AAPL, Microsoft Corp. MSFT, Amazon, Inc. AMZN, Alphabet, Inc. GOOG GOOGL, Tesla, Inc. TSLA and Meta Platforms, Inc. META — there has been some narrowing in valuations.

The equal-weighted index is trading at 16 times earnings as opposed to 19 or so with the Magnificent Seven, he said, adding there is room for valuation to grow across the board.

“There are other opportunities outside of the seven for sure,” he said.

The SPDR S&P 500 ETF Trust SPY, an exchange-traded fund tracking the S&P 500 Index, ended Tuesday’s session 1.47% lower at $425.88, according to Benzinga Pro data.

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