Members of the Federal Open Market Committee are not particularly interested in cutting rates anytime soon, as per minutes of their most recent meeting released on Tuesday.
S&P 500 could hit an all-time high in 2024Officials remain concerned that inflation could either prove to be stickier than expected or may even move up again in the coming months.
Still, Savita Subramanian – the Head of Equity Strategy at the Bank of America told clients in a research note this morning that the S&P 500 could touch 5,000 by the end of 2024.
We’re bullish not because we expect the Fed to cut, but because of what the Fed has accomplished.
Her forecast suggests another 10% upside on top of the 10% the benchmark index has already gained over the past four weeks.
Watch here: https://www.youtube.com/embed/iJwDsZEon3I?feature=oembedSubramanian names catalysts for the S&P 500Last week, the U.S. Bureau of Labour Statistics said inflation was up 3.2% in October – well above the Fed’s 2.0% target (read more).
Inflation rose 14% between July 2020 and July 2022.
But corporate profits rose by 75% over those two years — five times as fast as inflation.
Can we stop blaming higher prices on workers' wages now? Hello?
Nonetheless, Subramanian sees several other catalysts that could help buoy the stock market next year. These include a more than 6.0% year-on-year expected increase in S&P 500 earnings.
2024 is an election year that “tends to be a positive for equities” as well, added the Bank of America expert in her research note on Tuesday.
Much of the macroeconomic uncertainty and geopolitical risks, she added, are already priced in. Subramanian recommends betting on cyclical stocks for 2024 and is currently overweight real estate, energy, consumer discretionary, and financials.
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