Source: Zhitong Finance
Bank of America strategists said that the “bulls” of US stocks will soon enter their 11th year. The agency said the rebound is still in the “middle age” stage and expects it to soar by about 34% before the end of 2026.
Wall Street's recent bullish research reports can be described as being more aggressive. Following Goldman Sachs's bold prediction that the S&P 500 index is expected to rush to 6,000 points in 2024, Bank of America (Bank of America) recently released a research report stating that this long-term bull market in the US stock market is about to enter its 11th year. More importantly, the agency emphasized that from a technical analysis perspective, the US stock benchmark index, the S&P 500 index, is expected to rise further strongly over the next few years, thus fully continuing the “epic long bull” trend.
As the S&P 500 index continues to hit record highs this year, Bank of America strategists said that judging from technical trends in the stock market, the US stock market's epic “long bull” is expected to continue until around 2030, and it is expected that the S&P 500 index may rise to 7,000 points before the end of 2026 (by the end of the US stock market on Monday, the S&P 500 index closed at 5218.19 points).
Bank of America strategists said in the report that the long-term bull market for US stocks officially began in April 2013, when the US stock market surpassed the historical peaks set in 2007 and 2000. This long-term, epic bull market rally was confirmed once again in December 2023, when the S&P 500 broke through its technically critical “bullish cup pattern” near the 4,600 mark. Since then, the S&P 500 has climbed more than 14% and has continued to reach record highs since 2024.
Bank of America strategists expect the S&P 500's “epic bully” trend to continue, and suggest that the index may rise by another 34% by the end of 2026. “The S&P 500 index has rebounded sharply by about 46% from its phased low in October 2022,” said the strategy team led by Bank of America technology strategist Stephen Suttmeier (Stephen Suttmeier). “Furthermore, the US stock bull market with a breakthrough rebound of 106% from a historic low is likely to continue for about four years according to the median rebound theory, which means that the possibility that S&P will rise to 7,000 points by the end of 2026 is not ruled out.”
The epic “long bull” trend of US stocks that began in 2013 is expected to continue until 2030
As to when this epic “long-term bull market” of US stocks will show signs of stopping, Bank of America strategists led by Sattmeier do not expect to see the end of this “epic bull run” in US stocks until at least 2030. Bank of America strategists wrote, “The long-term bull market of US stocks from 1950-1966 and 1980 to 2000 continued for 16 and 20 years, respectively. This means that the current long-term bull market for US stocks is only in the 'middle age' stage and is likely to continue until 2029 to 2033.”
Bank of America strategists said in the research report that from a technical point of view, the S&P 500 index broke through the historic mark of 4,600 points in December last year, indicating that two recent price targets are expected to be achieved, namely 5,200 points and 5,600 points, respectively. Therefore, as the target of 5,200 points has been achieved, the next technical target for the S&P 500 index at least in 2024 will be to continue to rise 7% to around 5,600 points.
Furthermore, Bank of America strategists led by Sattmeier emphasized that the S&P 500 index broke through a record high of about 4,800 points in January, which indicates that another point target in the future will be around 6,150 points in terms of technology, and this technical target point can be described as very aggressive, which is 18% higher than the current S&P 500 point. However, to a certain extent, this point is in line with the “bullish trading cycle” associated with the US presidential election cycle — that is, the fourth year of the US president's first term is often very beneficial to the US stock market.
From a technical perspective, in terms of the downward bottom line indicator, Bank of America strategists led by Sattmeier said that investors should pay attention to the two important support levels of 4,800 and 4,600 points, which means that the index is likely to fall by as much as 12% from the current level under extreme negative catalysis.
As far as the outlook for US stocks in 2024 is concerned, more and more Wall Street strategists are raising the year-end point of the S&P 500 index!
It is worth noting that as far as the outlook for US stocks in 2024 is concerned, the major bearish forces on Wall Street have turned bullish one after another, and more top Wall Street strategists have raised the year-end position of the S&P 500 index.
Therefore, the 5,600 points predicted by the Bank of America Strategy Team based on the technical side is very likely to be achieved in 2024. Furthermore, the Bank of America team's more aggressive technical target point of 6150 points is likely to be achieved but is less likely, provided that the “Magnificent 7” (Magnificent 7), such as Nvidia and Microsoft, which have high weight in the S&P 500 index, continue to far exceed market expectations.
The seven tech giants, or Magnificent 7, include Apple, Microsoft, Google, Tesla, Nvidia, Amazon, and Meta Platforms. Global investors continued to flock to the seven tech giants from 2023 to early 2024, and in particular, continued to push Nvidia, Microsoft, and Meta stock prices to record highs. The main reason is that they are betting that tech giants are in the best position to use artificial intelligence technology to expand revenue due to their huge market size and financial strength. Of the 23% increase in the S&P 500 index in 2023, this group contributed about two-thirds.
The crazy boom of global companies deploying artificial intelligence and the unparalleled performance growth of “AI sellers” for four consecutive quarters came as a surprise to Wall Street forecasters, and prompted Wall Street strategists to believe that the AI era has arrived and that human social productivity is expected to enter a new stage, so they are racing to keep up with the pace of a stock market rebound that has exceeded their expectations, and more and more bearish strategists are turning to the bullish camp. Furthermore, there is even a view in the US stock market: regardless of whether an AI bubble exists or not, there is plenty of room for expansion in US technology stock valuations.
Piper Sandler strategist Michael Kantrowitz can be described as Wall Street's most bearish strategist on the US stock market in 2023. In 2023, the strategist was even bearish on US stocks to 3,225 points. However, the S&P 500 index hit Kantrowitz in the face of a “technical bull market” in 2023. Recently, the analyst raised the S&P 500 index's expectations to 5,250 points.
Star strategist Savita Subramanian (Savita Subramanian) from Bank of America raised the agency's year-end target for the S&P 500 index to 5,400 points, which is in line with the highest level on Wall Street. She joined Ed Yardeni (Ed Yardeni), the president and founder of Yardeni Research, and Jonathan Golub (Jonathan Golub), a well-known strategist at UBS Group AG (UBS Group AG). Both strategists who are bullish on US stocks have the same positive views on the outlook for US stocks until the end of the year, and are bullish to 5,400 points.
As the sharp rise in US stocks triggered a comprehensive comparison with the bubble period in the past, strategists at the major international bank Société Générale said that strong performance and signs of a renewed acceleration in the US economy suggest that this rise is reasonable. A team led by Manish Kabra (Manish Kabra), the bank's head of US stock strategy, wrote in a report released recently: “We believe the current rise is more driven by rational optimism than irrational prosperity.” The strategist mentioned the breadth of “better-than-expected” corporate profits, the high point of the new profit cycle, and the improvement in leading global indicators.
Regarding whether US technology stocks are currently in a bubble, Societe Generale Bank strategists led by Cabra said that if various data from the peak of the 1999 internet bubble were applied, the S&P 500 index would need to rise to at least 6,250 points to be compared to the level of the “tech stock bubble” of the irrational boom cycle at the time. In comparison, US stocks recently closed at 5218.19 points.
Furthermore, Bank Societe Generale strategists led by Cabra raised their target point for the S&P 500 index from 4,750 points to 5,500 points at the end of 2024. The strategists said that against the backdrop of improved corporate profit prospects and the boom in artificial intelligence, the record upward momentum in the US stock market can be described as unstoppable.
Strategists from Wall Street bank Goldman Sachs have reiterated that the S&P 500 target will be 5,200 points at the end of the year, but strategists believe that the continued strong performance of large technology companies such as Nvidia will drive technology stocks to continue to rise, which may in turn push the benchmark index to 6,000 points. “Our most optimistic forecast point would be for the S&P 500 to rise about 15% from its current level to reach 6,000 points by the end of the year.” Goldman Sachs strategists said in a research report released last Friday.
Barclays Bank can be described as one of Wall Street's most optimistic investment institutions for the US stock market. The agency's year-end target price for the US stock benchmark index, the S&P 500 index, was raised sharply from 4,800 points to 5,300 points, mainly because it is expected that US stocks will continue to benefit from the rich profit data of large technology companies and the excellent performance of the US economy beyond the expectations of the market. Barclays also pointed out in the report that if the core performance data of large technology companies continues to far exceed expectations, then the agency believes that the S&P 500 index may reach 6050 points by the end of this year.
editor/tolk