Citigroup raises STOXX 600 2024 year-end projection by 6%.

Citigroup has raised its year-end prediction for the STOXX 600 index (.STOXX) to 540 from 510 in 2024. The reason for this rise is that there is now more clarity regarding the trajectory of interest rates by the Federal Reserve, and there is also a possibility that the U.S. dollar would weaken. 

When compared to the previous goal of 510, this implies a 6% more significant rise. In addition, the brokerage's objective for the pan-European benchmark index indirectly represented an increase of over 6% in compared to the price at which it closed on Thursday.

"European equities tend to trade higher around rate cutting cycles," the Wall Street brokerage claimed in the report that was date-stamped on Thursday. The study was published on Thursday.

"This week's Federal Reserve meeting reduces some higher-for-longer risks, with cuts appearing to be firmly on the table," the financial services business added.

The Federal Reserve did not make any changes to the interest rate on Wednesday and continued to maintain its position that it will decrease the interest rate three times during the course of this year.

In addition, Citi raised its forecast for the earnings-per-share of European equities in 2024 from the previous range of 3% to 6%. 

This increase was made in place of the previous range. Because of the likely improvement in the expansion of the global economy, this action was taken in response to the situation.

A decrease in the value of the United States dollar is something that the brokerage plans to anticipate happening during the second quarter of 2024. According to the statement, "a weaker dollar should be supportive of European and ex-US equities," which is a contradiction in terms.

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