John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, revised his forecast for the S&P 500 Index (^GSPC), raising his year-end target for the index to 5,500. Similarly, Goldman Sachs predicted that the S&P 500 index could rise as high as 6,000 points in 2024, but could fall as low as 4,500 points if Big Tech companies underperform Wall Street expectations. .
Stoltzfus appears on Yahoo Finance Live to discuss the reasoning behind the new price target for the S&P 500 Index.
“There are a number of things that support this hike in terms of the S&P 500 price target, including that given the 11 rate hikes and six rate hike pauses at the highest level, the Federal Reserve has That includes being very sensitive to rate hike cycles.'' So they raised the federal funds rate from zero, from a range of 0.0 to 0.25% to a range of 5.25 to 5.5% within two years, pushing the economy into recession. I never let it happen. '' explains Stoltzfus. “If you look at the S&P 500's third and fourth quarter earnings last year, it was good for business.”
For more expert insights and the latest market trends, click here to watch the full episode of Yahoo Finance Live.
Editor's note: This article was written by luke carberry morgan.
video transcript
[AUDIO LOGO]
– Oppenheimer said the market still has room to move his team to raise its year-end forecast for the S&P 500 to 5,500. John Stoltzfus, Chief Investment Strategist at Oppenheimer & Co. John, it's good to see you again. I feel like you were saying not too long ago that your previous target on the street was a bull, one of the bullish voices on the street. So today we're raising our goal, our year-end goal, to 5,500 people. So please explain to us that bull case. What is driving the market upward?
John Stoltzfus: This goal is about 8% higher than the 5,200 goal set last December. Though many thought it was too optimistic at the time, it's only up about 5% since Friday's market close. There is a lot to support this increase in the S&P 500 price target. Among them is that the Fed is very sensitive to this federal funds rate hike cycle. If you think about it, they've raised rates 11 times and paused them at high levels six times.
So within two years, they raised the federal funds rate from zero, or the 0.0% to 0.25% range, to the 5.25% to 5.5% range, without pushing the economy into recession. It was good for business. If you look at the S&P 500's third and fourth quarter results last year, the fourth quarter earnings season ended successfully. On top of that, we found that despite some slowdown in consumer activity, consumers are in surprisingly good shape. Moreover, if we look broadly, we find that job postings remain surprisingly healthy.
So, the theme of resilience seems to be running even further. In the short term, we believe any pullback is an opportunity for investors to look for the baby thrown out with the bath water, and we may even have to raise our targets again later this year based on this resilience. thinking about. Although the Fed has had considerable success in reducing inflation, it is still far from its 2% goal, which has actually proven to be much more severe than inflation.
