By this time last year, the stock market’s rally had blown past even the most optimistic targets and Wall Street forecasters were convinced it couldn’t keep up the dizzying pace.
Alexandra Semenova and Sagarika Jaisinghani, Bloomberg News --
“There is an element of miraculousness to it,” said Julian Emanuel, chief equity and quantitative strategist at Evercore ISI, who by mid-year abandoned his call for a slight dip in the S&P 500 and was the first among major strategists to introduce a year-end target of 6,000. “Trends can go on longer and go farther than one could ever imagine.”
The economy’s strength has supported the stock market’s rise by trickling down to corporate profits. At the same time, excitement about AI continued to push up the stocks of big tech companies like Alphabet Inc., Amazon.com Inc., Apple Inc., Meta Platforms Inc. and Nvidia Corp. The rally got another boost from Donald Trump’s presidential victory by promising tax cuts and corporate-friendly policies.
Lakos-Bujas said some of the team’s missteps reflected the difficulty of anticipating the surge of the so-called Magnificent Seven tech stocks, which account for an outsized chunk of the S&P 500’s gains. But he said there’s solid reasons for the optimism from here, citing an easing Fed, the change of power in Washington, and a Chinese government that’s eager to keep its economy humming.
When the targets were first published in late 2023, even the most bullish forecasters at the time — Fundstrat’s Tom Lee and Oppenheimer’s John Stoltzfus — expected the S&P 500 to rise only about 9% to 5,200, a level that it surpassed in less than three months. Those concerns are already being reflected into the final stretch of 2024, with the S&P 500 slumping for a third-straight session on Monday, led by declines in technology high-fliers.
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