According to Oppenheimer Asset Management's year-end target projection for the benchmark S&P 500 (.SPX), which was released on Monday, the company became the most bullish among global brokerages. The company cited solid economic data and effective monetary policy as the reasons for its optimism.
Additionally, it increased its annual earnings-per-share prediction for the S&P 500 to $250 from $240. The objective for the index was raised from 5,200 to 5,500, and the target was also raised.
The chief investment strategist at Oppenheimer, John Stoltzfus, stated in a note that there is a chance to adjust our objective higher. "A shift in (investor) mindset driven not so much by fear and greed but a need to invest for intermediate to longer-term goals suggests to us an opportunity to tweak our target higher," Stoltzfus said.
Earlier in the day, HSBC increased its year-end estimate for the S&P 500 to 5,400 from its previous forecast of 5,000. This was done on the assumption that the economy of the United States would have a soft landing, which would suggest an upside of almost 3% to the current levels.
For the updated target, it is assumed that economic growth will continue to be resilient and that possible rate reduction will be beneficial for equities that are not related to technology. "The higher target stems from better earnings expectations, supported by resilient GDP growth, recent earnings beats and positive sentiment from corporates in the last earnings season," according to a note issued by HSBC strategists.
As was the case with its competitors BofA Global Research and UBS, HSBC predicted that the index would reach 5,400 by the end of the year 2024. Friday marked the day that the S&P 500 achieved its highest weekly percentage rise since the year 2024.
It is anticipated by the brokerage that the second half of 2024 would be "more volatile" as a result of the elections in the United States, increased expectations for earnings, and a shifting narrative from "when" to "how much" the Federal Reserve will reduce interest rates.
Last week, the Federal Reserve of the United States did not modify the banks' interest rate and maintained its forecast that there will be three reductions in interest rates before the end of the year. HSBC anticipates a year-end target of 4,800 if economic data continues to run hot, which might lead to a rebound of inflation. This expectations are based on the bear-case scenario that the bank has developed.
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