Deutsche Bank, Bank of America Predict Stocks Will Hit Record Highs in 2024

Wall Street analysts are increasingly bullish on the S&P’s 500 performance over the next year, predicting it will eclipse its record set in January 2022.

Strategists at Deutsche Bank Group, headed by Bankim "Binky" Chadha, are expecting the index to reach 5,100 points by the end of 2024 as inflation slows and companies post strong earnings, they said in a research note reported by Bloomberg. That's almost 12% up from where it's currently trading, at around 4,557 points.

“Despite above-trend growth, core inflation has fallen,” the strategists wrote. “Continued declines would return inflation to its pre-pandemic range without requiring slower growth.” Because a recession “is widely anticipated and expected to be mild and short” the strategists predict a modest and brief selloff.

The projections suggest an approximately 12% increase in the S&P 500 from today's levels. The S&P 500 hit its all-time record of 4,796.56 in early January 2022.

BofA Global Research’s Savita Subramanian and RBC Capital Markets’ Lori Calvasina shared the sentiment, both forecasting that the S&P 500 will end 2024 at an all-time high of 5,000. 

RBC’s Calvasina wrote that the biggest headwinds to stock performance in the coming year will be the sluggish economy and uncertainty around the 2024 presidential elections. She also underscored that earnings will be strong enough to justify another year of gains.

Subramanian’s bullishness on equities is based on the Federal Reserve’s existing policies and how corporations have adapted, according to BofA. 

Next year will also be “the year of the landing,” with BofA strategists expecting disinflation to continue and rate cuts to begin midway through the year from both the Federal Reserve and European Central Bank.

“2023 defied almost everyone's expectations: recessions that never came, rate cuts that didn't materialize, bond markets that didn't bounce, except in short-lived, vicious spurts, and rising equities that pained most investors who remained cautiously underweight,” Candace Browning, head of BofA Global Research, said in an accompanying statement. “We expect 2024 to be the year when central banks can successfully orchestrate a soft landing, though recognize that downside risks may outnumber the upside ones.”

Strategists at other firms, including Goldman Sachs, Société Générale and Morgan Stanley, are also projecting a good year for the index.