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Wall Street's biggest bulls wish they had been more bullish. But he's making up for it now.
“It is clear that we underestimated the strength of market momentum,” Brian Belsky, chief investment strategist at BMO Capital Markets, said in a note Wednesday morning revising his 2024 year-end forecast to a street high of $5,600. It became,” he said.
Buoyed by Wednesday's moderate inflation data, the stock closed at 5,308, 5.5% shy of Belsky's target.
Belsky is not known for being underrated. Last November, the strategist's team set a high-water mark of 5,100 for their 2024 forecast, one of the few teams to break the 5,000 mark.
The index at the time was 4,550, more than 5% off its January 2022 peak of 4,796.
Belcusi's call proved prescient.
And before the calendar turned, Goldman Sachs, Deutsche Bank and Citi joined BMO at 5,100, while Oppenheimer and Fundstrat took pole position at 5,200. And as the S&P 500 far exceeded the Street's expectations in March, several companies adjusted their forecasts.
BMO didn't, but it was also a move that seemed prescient given that the index fell to 4,967 in April.
“In late February, we decided to draw a line in the sand against our 2024 S&P 500 price target of 5,100 because we thought the market was performing a little too far, too fast,” Belsky said. I mentioned and wrote about stock prices. The stock has now climbed well over 20% from its October low in just a few months.
But this cautiousness was actually a mistake, strategists said.
In the three months since then, the stock market has fallen and hit new all-time highs (pick your index, they've all peaked), largely due to the alignment between investor expectations and the Fed's guidance. is. CPI remains in the right direction.
“We are happy with the situation as we believe the market is moving in a similar way to 2021 and 2023. It has been a year in which we have not been able to fully appreciate the strength of market momentum, and this time is trying to avoid that,” Belsky added. .
The BMO team found that the first two years of this new bull market lagged the average performance seen during the first two years of the new bull market. Therefore, although little has changed in terms of fundamentals and general economic conditions, revised forecasts are supported by sentiment, expectations, and more obscure aspects of the stock market.
BMO's latest forecast points to a nice destination for bulls, but includes a notable warning about the potential for turbulence.
“The 5.5% drawdown that occurred between March and April is the worst for the S&P 500 this year, given historical data showing that the average drawdown in the second year of past bull markets is 9.4%. I remain skeptical as to whether this is the case,” Belsky wrote.
It ended the year at $5,600, and has it fallen more than 5.5% between now and then?
This feels more bullish than a simple 5,600 person target.
ethan wolfman He is a senior editor at Yahoo Finance and runs the newsletter. Follow him on Twitter @ewolffmann.
