Bank of America raises S&P 500 outlook to tie highest 2024 forecast on Wall Street
Bank of America is now one of the biggest bulls on Wall Street. Savita Subramanian, BofA Securities head of U.S. equity and quantitative strategy, raised her S & P 500 year-end target to 5,400 from 5,000, seeing another 5% upside from current levels and a 13% gain for the full year in 2024. Her new forecast is tied with UBS for the highest among sell-side strategists, and is also about 5% higher than the average projection of 5,032, according to the CNBC Pro Market Strategist Survey , which rounds up the targets from the top 14 Wall Street strategists. .SPX 1Y mountain S & P 500 Bank of America hiked its forecast after companies showed that profit margins have held up despite big swings in interest rates and inflation. "We see potential for improved margin stability from here as companies shift from global cost arbitrage and free capital-driven growth to efficiency/productivity," Subramanian said. Still, the strategist said her bullish conviction has cooled after the strong leg up to start the year. The S & P 500 has rallied about 8% this year and scored consecutive record highs. Subramanian noted that the advance in the S & P 500 has been "stubbornly narrow," with four stocks driving 45% of the February gains. "We expect leadership to broaden as the gap between earnings growth of the Magnificent 7 and the rest of the S & P 500 begin to narrow," she said. But for all the optimism, the strategist also said a pullback is likely on the short-term horizon, if history is any guide. She noted that since 1929, 5% pullbacks have occurred on average three times a year and 10% corrections have occurred once per year. In the current environment, there has been no meaningful drop for four months, she said. However, a rally late in the year is also possible as the market tends to advance after Election Day as uncertainty is removed, she added.