Strategists at Oppenheimer Asset Management predict that by the end of this year, the S&P 500 index is likely to grow by almost 10% (compared with Tuesday's closing level) and reach 5,200 points, which will be facilitated by the “fundamental improvements" in the stock market. Strategists said they remain overweight on equities, favoring cyclical over defensive sectors. In addition, they forecast further growth of U.S. corporate revenues and earnings during 2024. They noted in early December that they see the earnings for the S&P 500 companies reaching $240 per share and the price-to-earnings ratio for the index expanding toward 21.7 times 12-month forward earnings in 2024.
However, strategists warned that given the rally of the US stock market since October 27, a correction of indices in January is not excluded, while markets are likely to remain dependent on data until the start of the reporting season for the fourth quarter at the end of next week. The S&P 500 index rose 11.2% in the fourth quarter (the largest increase since the fourth quarter of 2020) and gained 24.2% for the whole of 2023.
“Markets often pause to digest growth of the scale seen in the fourth quarter,” the strategists said.