“Stocks lead earnings, which lead the economy, and it’s absolutely ridiculous when I hear people saying ‘I’m going to wait, the recession will tell us when to buy stocks.’ No, it won’t. Stocks tell you when we’re going to have a recession,” he said. “People have become too formulaic and stuck in their ways.”
For 2024, Belski expects a resilient labor market, easing consumer-price pressures and rate cuts in the second half of the year to drive the S&P 500 to 5,100.
John Stoltzfus, Oppenheimer
Heading into 2023, Stoltzfus, the firm’s chief investment strategist, saw the S&P 500 closing the year at 4,400. At the time, his call was one of the rosiest on the street.
The forecaster said inflation trending lower supported sentiment, and while bears deemed earnings estimates too optimistic, he called them “right-sized.”
“The markets became grossly oversold in the process of the selloffs that occurred in 2022,” he said. “Bear markets are always oversold, and then it’s recognized that they’re oversold, and you get some kind of a rally.”
He’s staying optimistic, predicting the S&P 500 will hit 5,200 before 2024 is out.
Savita Subramanian, Bank of America
Subramanian, head of US equity and quantitative strategy, emerged as one of this year’s winners thanks to a mid-year call to turn positive on stocks.
Although she entered 2023 with a downbeat view, with a call of 4,000, she shifted in May to a bullish stance, and a wave of sell-side forecasters followed suit. She upgraded her year-end target on the S&P 500 twice, to 4,600.
“It felt like a tough message to deliver to clients,” she said. Coming after the regional banking tumult, “there was a sense that this was the beginning of the end and everything was going to go the way of 2008.” When it feels difficult to make a call, “those are the times that you’re probably going to be more likely right than wrong,” she said.
Subramanian remains bullish heading into 2024, with a target of 5,000. She sees a soft landing and companies and consumers adapting to higher rates as reasons equities can advance.
Ryan Detrick, Carson Group
Detrick expected the US economy to avoid a recession this year. He also bet inflation would cool sooner than the market was expecting. The strategist added exposure to stocks during the banking turmoil in March and as the S&P 500 sank in October.
“The March selloff was quite scary,” Detrick said. “But we said then it was just a few bad actors and it wasn’t going to be systemic.”
The strategist doesn’t anticipate a recession next year either, and expects some of this year’s laggards—rather than the so-called Magnificent Seven technology stocks—to power “low double-digit” returns in equities. “Small-caps, mid-caps and financials—those are our three favorites.”
This article was provided by Bloomberg News.