Projections for stocks listed on the S&P 500 have received yet another boost. Christopher Harvey, the head of equity at Wells Fargo & Company (WFC), increased the year-end target for this index to 5,535.
S&P 500 Gets Its Highest Stock Forecast So Far This Year
This is the highest mark so far and, according to Yahoo Finance, reflects an estimated 6% jump from the opening benchmark mean on Monday, 8 April 2024. In a note to clients, Harvey postulated that investors are overlooking the possibility of stock valuations that are too high in the present market clime. This keeps current market rallies going and creates opportunities for additional hikes.
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Christopher Harvey, LinkedIn
Harvey is one of several economists who boosted their S&P 500 projections for 2024 in a bid to keep up the high note on which stocks kicked off the year. He wrote:
The bull market, AI’s secular growth story, and index concentration have shifted investors’ attention away from traditional relative valuation measures and toward longer-term growth and discounting metrics. Investors’ valuation thresholds have decreased, and time horizons have appeared to have increased since 2023 due to this secular optimism.
Analysts, including Harvey, believe that given the S&P 500’s approximate 9% spike so far this year, the next benchmark hike may not come as quickly. Evidence of this recently surfaced as shares dropped, the 10-year Treasury yield achieved its highest mark since November 2023, and the CBOE volatility index experienced the most significant surge in over six months.
Harvey further noted:
We believe equities have some upside from here, but still anticipate a volatility spike in [the first half of 2024] while a [second half of 2024] ‘melt-up’ appears increasingly likely, partly driven by political outcomes that support greater M&A and partly by an anticipated multi-year easing cycle that supports risk-taking.
