Analysts Who Accurately Predicted the Stock Market’s Rise in 2023 Share Their Standard & Poor’s 500 Index Projections for the Next Year From Investing.com

The index is having an exceptional year. The main US stock market gauge has risen 19.7% since the start of the year as investors push the index towards the 4600 level.

Analysts at Stifel, who have a track record of accurately forecasting the market’s surge in the first half of 2023, believe this surge has largely occurred.

Analysts raised their mid-2024 forecast for the S&P 500 Index to 4650, up from their previous forecast of 4400.

“We expect the S&P 500 to peak near 4650 by mid-2024, as big tech companies lose momentum slightly to sectors such as banking, industrial equipment, energy, financial services, insurance, basic materials, real estate and transportation. This shift is due to sustained economic expansion, persistent inflation, and ongoing restrictive monetary policy by the Federal Reserve,” the report said.

Market experts predict that the Federal Reserve will not consider cutting interest rates until the second half of next year.

“The Federal Reserve’s decisions are crucial to the possibility of a second downturn in the economy in the second half of 2024,” they said.

Furthermore, they expect the inflation-adjusted returns of the S&P 500 Index to not change significantly over the next ten years.

“We expect the S&P 500 Index to move within a certain inflation-adjusted range, which we expect to continue into the early 2030s.”

“In periods of economic growth characterized by moderate inflation, which we expect for 2020, sectors such as Value stocks, Small Caps and international stocks tend to perform well. However, overall returns of the S&P 500 Index are likely to be lower than the growth-dominated 14.1% annualized real total return (adjusted for inflation and including reinvested dividends) recorded from 2011 to 2021. We believe such high returns will not be seen again for a long time,” they concluded.

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