The stock market is on a roll in 2024, with projections reaching new heights. Wells Fargo’s head of equity strategy, Christopher Harvey, has raised his year-end target for the S&P 500 to 5,535 from 4,625, making it the highest call among strategists tracked by Yahoo Finance. This represents a 6% upside from where the benchmark average opened on Monday.
Harvey attributes this bullish outlook to investors looking past concerns about high stock valuations and focusing on longer-term growth and discounting metrics. He believes that the current market moment, driven by the bull market and AI’s secular growth story, has shifted investors’ attention away from traditional valuation measures.
Despite the strong performance of the stock market so far in 2024, Harvey and other strategists caution that the next leg higher for the S&P 500 may not come as swiftly for investors. Recent spikes in the 10-year Treasury yield and the CBOE volatility index suggest that volatility could increase in the first half of the year.
Harvey also highlights key risks to his base case, including a resurgence in inflation that could change the Fed’s interest rate forecast and elevated bond yields. However, with the 10-year Treasury yield currently hovering around 4.43%, well below the 5% level of concern, the outlook remains positive for now.
As the stock market continues to show strength, investors will be closely watching for any developments that could impact the market’s trajectory. Stay tuned for the latest updates on this evolving story.
