5150 points! Wall Street's optimism is rising, with UBS Group AG joining the ranks of raising expectations for US stocks.

Zhitong App learned that after the Federal Reserve released a dovish signal in December last year, UBS Group AG became the latest bank to raise its expectations for US stocks. UBS Group AG raised its forecast for the Pro UltrPro Shrt S&Pro 500 in 2024 by 6% to 5150 points on Tuesday. About a month ago, the Swiss bank projected the Pro UltrPro Shrt S&Pro 500 to be 4850 points in the next year. Since mid-December last year, Goldman Sachs and Royal Bank of Canada have also raised their expectations for US stocks.

UBS Group AG strategists Jonathan Golub and Patrick Palfrey emphasized the upside risks expected by the bank when they released their annual outlook on December 11th. The reasons include strong corporate performance, cooling inflation, prospects for loose monetary policy, and favorable economic momentum.

"These considerations, along with the Fed's recent pivot, subsequent rate expectations, and above-trend 2024 EPS revisions, lead us to now view this upside scenario as our base case," the two strategists said in the report on Tuesday.

Sell-side strategists quickly raised their forecasts for the Pro UltrPro Shrt S&Pro 500 in 2024.

The US stock market started the year 2024 unsteadily, as concerns grew that the bullish sentiment and positioning became too stretched after a sharp rise in the stock market at the end of last year. The latest fund manager survey from Bank of America showed that bets on a rate cut by the Federal Reserve have prompted investors to increase their exposure to US stocks to the highest level in over two years.

Steve Sosnick, Chief Strategist at Interactive Brokers, said, "Strategists, like everyone else, may be drawn to this enthusiasm, and because no one wants to be left behind, target levels will rise as the market rises. That being said, I don't remember them being raised so quickly after the beginning of the year, especially when the Pro UltrPro Shrt S&Pro 500 did not reach a new high."

On Tuesday, Federal Reserve Governor Christopher Waller said that if inflation does not accelerate again, the Fed may cut interest rates this year, while emphasizing that the Fed should be cautious and systematic in easing monetary policy, which hit the bulls. US Treasury yields rose and the US stock market fell as traders reduced bets on the Fed's earliest rate cut in March and the overall level of accommodation this year. The Pro UltrPro Shrt S&Pro 500 closed down 0.37% on Tuesday at 4765.98 points. Most sell-side strategists are not deterred by the risk of market overextension. Last week, Lori Calvasina of Royal Bank of Canada stated that despite the weak start in January being "just the beginning of the turbulence phase," the long-term prospects for the U.S. stock market remain constructive.

This month, she raised her year-end target for the Pro UltrPro Shrt S&Pro 500 from 5,000 points at the end of November to 5,150 points. In December, David Kostin of Goldman Sachs raised his year-end target for the Pro UltrPro Shrt S&Pro 500 to 5,100 points, nearly 9% higher than his mid-November prediction of 4,700 points.

As of January 16th, the average target for sell-side strategists tracked by Bloomberg was 4,851 points, compared to 4,546 points at the end of November last year.