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Traders should brace themselves for a topsy-turvy 2024, as predicted by Société Générale.
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Expect the S&P 500 to soar in the first quarter, and then experience a 12% drop, according to the French bank.
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This plummet will position the benchmark index in “buy the dip” territory by the year’s end.
Prepare for a volatile 2024 where the S&P 500 will reach record highs, plunge, and then make a comeback, per Société Générale.
In its projection for the upcoming year, the French bank stated that it expects the benchmark index to reach 4,750 points during the first three months of the year, bringing it close to the all-time high of 4,796 it reached in January 2022.
The S&P 500 will then experience a 12% decline to 4,200 in mid-2024 as the US faces a mild recession, before rising again to 4,750 in the fourth quarter due to the Federal Reserve’s interest rate cuts, according to SocGen.
“By the end of the year, we expect to see rate cuts by the Fed of 150 basis points, a downturn in GDP growth and clarity on the political election cycle,” explained head of US equity strategy Manish Kabra. “The S&P 500 should be in ‘buy-the-dip’ territory, as leading indicators for profits continue to improve.”
“Yet, the journey to the end of the year should be far from smooth, as we expect a mild recession in the middle of the year, a credit market sell-off in 2Q and ongoing quantitative tightening,” he added.
The S&P 500 traded at 4,556 as of Wednesday’s closing bell. It’s climbed 19% year-to-date, lifted by the stellar performance of the so-called “Magnificent Seven” Big Tech stocks and investors’ hope that the Fed is gearing up to cut borrowing costs.
Kabra isn’t the only top Wall Street strategist who predicts that the index could flirt with record highs next year.
Goldman Sachs’ David Kostin said earlier this month that he’s expecting the S&P 500 to trade at 4,700 points by the end of 2024.
Meanwhile, both Bank of America and RBC Capital Markets have set year-end targets of 5,000, which would see the gauge comfortably clear its previous all-time highs.
Read the original article on Business Insider
