Zhitong
2023.11.30 01:46
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Wall Street's most pessimistic forecast is out! JPMorgan Chase predicts that the S&P 500 will fall to 4,200 points next year.

Wall Street's most pessimistic forecast is out! JPMorgan Chase predicts that the S&P 500 index will fall to 4,200 points next year, a decrease of about 8% from current levels. JPMorgan Chase states that factors such as global economic slowdown, reduced household savings, and geopolitical risks may exacerbate policy volatility and pose challenges to the stock market. However, other institutions generally predict that the S&P 500 index will reach new historical highs. JPMorgan Chase's forecast is the lowest among Wall Street tracking institutions. Currently, the S&P 500 index has surged nearly 19%, driven by strong economic data and a rebound in corporate profits. JPMorgan Chase's forecast has attracted widespread attention.

Zhitong App has learned that while Wall Street strategists are predicting that the US stock market will reach new highs next year, JPMorgan Chase has released its most pessimistic forecast to date. Dubravko Lakos-Bujas, JPMorgan Chase's Chief Global Equity Strategist, stated that with global economic growth slowing down, household savings shrinking, and geopolitical risks remaining high, including the upcoming national elections in the United States which may exacerbate policy volatility, the S&P 500 index is expected to fall to 4,200 points by the end of 2024, a decrease of about 8% from its current level.

This forecast is consistent with the bank's bearish outlook for this year, but against the backdrop of economic recovery, the US stock market is expected to achieve double-digit gains this year.

Lakos-Bujas and his team stated in their report on Wednesday, "If the Federal Reserve does not quickly ease monetary policy, we expect the macro backdrop for the stock market to become more challenging next year, consumer trends will weaken, and investors' positions and sentiment will mostly reverse." Lakos-Bujas' team includes Chief Market Strategist Marko Kolanovic.

JPMorgan Chase's view is in sharp contrast to the prevailing view on Wall Street. More and more Wall Street strategists are predicting that the S&P 500 index will reach new highs. Savita Subramanian of Bank of America and Binky Chadha of Deutsche Bank believe that the index will reach 5,000 points or higher next year, while David Kostin of Goldman Sachs believes that the S&P 500 index will at least approach its previous peak.

Even Mike Wilson, a Morgan Stanley analyst who has been consistently bearish on the stock market, has become more optimistic, predicting that the S&P 500 index will close at 4,500 points. JPMorgan Chase's forecast is the lowest among the institutions tracked by Bloomberg, with the current average target being around 4,664 points.

JPMorgan Chase sets the most pessimistic year-end target for the S&P 500 index on Wall Street in 2024

Since the beginning of this year, the S&P 500 index has surged nearly 19%, driven by strong economic data, declining inflation, and the belief that the Federal Reserve's rate hikes are coming to an end. The rebound in corporate profits and the AI boom have propelled technology stocks to a significant increase, boosting market sentiment throughout 2023.

JPMorgan Chase states that the consensus estimate implies a significant acceleration in economic growth, consistent with the early stages of a recovery cycle. However, compared to the potential prospect of higher long-term interest rates, this estimate appears to be too high. Despite maintaining its bearish outlook, the bank expects net profits to grow by 2-3% in 2024, with earnings per share at $225.