S&P 500 headed for new all-time high in 2024


  • The S&P 500 is set to hit a new all-time high by mid-2024, according to a JPMorgan strategist.
  • This is because the Federal Reserve is likely to raise rates, AJ Oden told CNBC.
  • A new S&P 500 record represents a rise of at least 12% from current levels.

The S&P 500 is set to hit a new record next year as the Federal Reserve is likely to raise interest rates, according to AJ Oden, global investment strategist at JPMorgan Wealth Management.

He said the bank’s strategists expect the S&P 500 to hit a new high in mid-2024. This means an increase of at least 12% from current levels by January 2022 and will top the current all-time record of 4,796.

This is mainly because JPMorgan expects the Fed to cut rates soon, which is a bullish factor for stocks.

Odden said Fed officials now seem more bullish on the economy after central bankers raised interest rates aggressively last year to curb inflation.

He pointed to the Fed’s latest summary of economic projections, where personal consumption expenditure inflation – the Fed’s preferred inflation measure – is projected to decline to 2% by 2026.

“If we look at the Fed meeting and their SEP, it looks like a soft-landing makes a lot of sense for them,” Oden said in an interview with CNBC on Tuesday. “When you look at SEPs it seems like a Goldilocks scenario.”

Meanwhile, according to the CME FedWatch tool, the market has pegged a 44% chance that rates will fall below their current levels by June 2024.

“This is a soft-landing base case,” he later added about his stock market forecast. “At some point you think the Fed is going to pivot, and the market will rally from there.”

Oden said a rally from future rate cuts would be helped by a strong US consumer sentiment as well. Although financial conditions have tightened significantly in the past year, consumer spending remains strong, and he said 88% of consumer discretionary stocks in the S&P 500 are “poised to perform quite well.”

These views contrast with more bearish stock market forecasters, who say a recession is imminent as inflation potentially rises and the Fed keeps interest rates in restrictive territory.

Investors have been jittery since Fed Chairman Jerome Powell warned that interest rates would remain high for a longer period of time at the Fed’s September policy meeting, sparking a selloff in equities while bond yields rose.

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