Investment Firm Forecasts S&P Will Go Higher In 2024

Forecasts

Published: December 8, 2024 11:49 am

Last Updated: December 9, 2024 6:58 am

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Key Points

One of Wall Street’s biggest bulls expects the S&P 500 to make further gains this year.
Will the S&P 500 hit 6,200 by New Year’s Eve?
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There are only three weeks before the end of 2024. However, one investment bank forecasts a further rise in the S&P 500, which is already up 28% this year. Oppenheimer forecasts the index will hit 6,200, above the current 6,090 level.

Oppenheimer had three other forecasts for the S&P level earlier this year. Each was too low: 5,200 at the start of the year, 5,500 in March, and 5,900 in July.

The S&P’s price-to-earnings (PE) ratio is a high 31. It has rarely been that high since late 2021, when it briefly hit 37. By June 2022, it had collapsed to 19. It has risen fairly steadily since then.

Several catalysts have driven the S&P 500 higher recently. The first is strong earnings from the market’s mega-cap stocks, especially Nvidia Corp. (NASDAQ: NVDA), Amazon.com Inc. (NASDAQ: AMZN), Meta Platforms Inc. (NASDAQ: META), and Tesla Inc. (NASDAQ: TSLA).

The U.S. economy has usually been strong this year. The GDP growth rate was 3.0% in the second quarter of this year and 2.8% in the third quarter. This is coupled with unemployment. The economy has added over 200,000 jobs in several months this year. Unemployment has also been at or below 4% for several months in 2024.

Inflation has come down, probably because of the Federal Reserve’s rate increases. The consumer price index was up 9.1% year over year in June 2022. It has been below 3% each month since this July.

Finally, there has been a market surge since Donald Trump was elected president. His policies are expected to be “pro-business.” The S&P 500 was 5,700 the day before the election.

The Oppenheimer forecast may be the most aggressive on Wall Street, but recent history shows the S&P 500 could be 6,200 on New Year’s Eve.

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