According to Yahoo News, Deutsche Bank announced on Monday that it anticipates the S&P 500 to conclude 2024 with a 12% increase, as earnings growth is expected to remain strong even if the United States undergoes a mild and brief recession. The bank's strategists predict the index will reach 5,100 points by the end of 2024. So far this year, the S&P 500 has risen nearly 19%.
Deutsche Bank estimates a 10% increase in earnings for S&P 500 companies after accounting for a potential "mild short" recession. If the U.S. gross domestic product (GDP) grows by 2%, the bank expects profits for index companies to rise by 19% in the coming year. The 2024-end S&P 500 target set by Deutsche Bank is 8.5% higher than the 4,700 median forecast of 33 strategists surveyed by Reuters.
The strategists stated that if earnings growth continues to recover as projected, valuations will remain well supported around the top of the range, which is typical when pricing in an increase in earnings growth. They also noted that a decline in core inflation to pre-pandemic levels without a slowdown in growth could support the benchmark index, as it would imply that the Federal Reserve would not reduce rates unless a recession occurs.
Last week, BofA Global Research predicted that the benchmark would end 2024 at 5,000 points as macro concerns decrease and the Fed holds off on rate hikes. (Reporting by Roshan Abraham in Bengaluru; Editing by Rashmi Aich and Mrigank Dhaniwala)
Miyuki
