S&P 500 To Soar 12% And Reach New Record Highs In 2024, Defying Recession Threat: BMO Strategist

BMO’s chief investment strategist, Brian Belski, predicts a strong performance for the stock market in 2024, even in the face of a potential recession.

What Happened: Belski has set a 2024 year-end S&P 500 price target of 5,100, signaling a potential 12% upside from present levels, reported Business Insider. A combination of factors such as declining inflation and interest rates, a robust job market, and climbing corporate earnings are expected to drive the stock market in the coming year.

Belski’s prognosis indicates a “normal and typical” year for the stock market in 2024, with gains being evenly distributed across sectors and sizes. This is in stark contrast to the tech-dominated gains of the current year. He also foresees a mild recession for the coming year, which he describes as “in name only”. If this recession is successfully averted, it could potentially push the S&P 500 even higher, possibly reaching around 5,500 in his bullish scenario.

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“Unfortunately, bearish fear sells, and bulls are routinely doubted and panned. So, get ready for another year of analysis paralysis of US Federal Reserve policy, the impacts of the unflattening of the yield curve, unemployment drifting higher, and, of course, the ‘Chicken Little recession’ and its market impact that has been apparently just around the corner for the past few years and counting,” Belski said.

In deriving his 2024 S&P 500 target, the strategist applied a 20.4x multiple to earnings estimates of $250 per share. Belski’s advice to investors is to overweight the information technology and financial sectors, whilst steering clear of the energy, materials, and consumer staples sectors.

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