US stocks are likely to take a breather from their rapid gains before a potential fresh catalyst arrives in the form of the next earnings season, according to Oppenheimer Asset Management.

Investors itching to see the S&P 500 build on the 11% advance in the final three months of last year may not have long to wait, with US companies due to start reporting results at the end of next week.

“It’s not uncommon for markets to pause to digest a bull run of the magnitude experienced in the fourth quarter just ended,” Chief Investment Strategist John Stoltzfus wrote in a note. “In fact it would appear to us to make good sense for markets to pause considering the run-up in stock prices” from their October lows through December, he said.

A stronger-than-expected economy and expectations that the Federal Reserve would pivot to monetary easing propelled a 24% rally in the S&P 500 in 2023. Stoltzfus was among few to correctly predict the US benchmark would soar in 2023 and he’s staying optimistic, tipping the index to hit 5,200 before 2024 is out. That ties with Fundstrat’s Tom Lee for the most bullish forecast among strategists tracked by Bloomberg.

The gauge is a few points shy of its record closing high and a 9% advance to Stoltzfus’s target would put it well beyond that level. “A close above the prior high could provide a boost in sentiment that could move stocks higher near-term,” the strategist said.

The focus will soon shift to the fourth-quarter earnings season, which officially kicks off on Jan. 12 when big banks including JPMorgan Chase & Co. report. Investors will likely set a high bar after stocks surged last year. But even so, Stoltzfus sees markets grinding higher before the year ends.

“Our expectations are for further upside in stock prices this year supported by the improvements in fundamentals,” he said.

This article was provided by Bloomberg News.