Much like other Wall Street strategists, Oppenheimer remains bullish on 2024, outlined in the firm's forecast for the S&P 500 (^GSPC) to reach a 5,200-point target by next year’s end.
Oppenheimer Asset Management Chief Investment Strategist John Stoltzfus, who is behind this 2024 projection, joins Yahoo Finance Live to discuss the market sectors expected to find growth in 2024 and where the Federal Reserve's interest rate policy may be inspiring opportunities for investors.
"It's not a robust economy, but a resilient economy evidenced by business and the consumer with jobs still remaining plentiful even as that jobs number comes down," Stoltzfus says, "And the likelihood that this will bode very well for revenues and earnings, not only for the S&P 500 but likely for other major indices, including mid-caps and even small caps."
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
This post was written by Luke Carberry Mogan.
Video Transcript
SEANA SMITH: Oppenheimer has one of the highest targets on the street for the S&P.
Their year-end S&P target for 2024 is 5,200.
We want to bring in John Stoltzfus, the man behind that call, Oppenheimer asset management chief investment strategist.
John, it's great to see you.
So let's talk about the bullish outlook that you have for 2024.
Why are you confident or what makes you so optimistic at this point that some of this momentum is going to carry into the new year?
JOHN STOLTZFUS: Well, first of all, thanks for having me on the show, Seana.
We're positive on this because we really feel that what we saw this year has been the re-establishment of fundamentals that justified the market moving higher, going back to levels that haven't been seen now since prior to the sell off that we saw last year.
And at this point, fundamentals likely to continue into next year remaining positive as the Fed remains vigilant against inflation, but also remains as it has been this whole Fed funds hike cycle except for when it raised rates at 75 bips four times in a row.
Essentially, what you have here is a Fed that has been very sensitive as to how its mandate affects the economy.
So we think that's what really carries this.
It's not a robust economy, but a resilient economy evidenced by business and the consumer with jobs still remaining plentiful even as that jobs number has come down and the likelihood that this will bode very well for revenues and earnings not only for the S&P 500, but likely for other major indices, including mid-caps and even small caps.
BRAD SMITH: And so John, you were, kind of, giving us some indication of how much this call that you've made also relies on the Fed.
How many cuts, though does it also rely on from the Fed potentially?
JOHN STOLTZFUS: Actually, Brad, much fewer calls than the traders will tell you are coming up.
We think next year, the Fed likely remains on a long pause or a long skip as it has been this year with the likelihood that in the second half of the year is when we'll see the cuts.
And in that second half, maybe one or two cuts/ the biggest problem being that you'll have with higher wages, people continue to spend.
And the ability to remove all that stickiness and inflation might be tougher to find, but nothing overly negative we think for equities in terms of Federal Reserve action.
BRAD SMITH: John, you mentioned there earnings just a moment ago.
When it comes to some of those positive trends that we have seen over the last quarter or two up until this point, what do you think earnings growth looks like as you look ahead to 2024?
JOHN STOLTZFUS: Yeah.
We were looking for-- we readjusted our earnings target down from 230 to 220 for 2023, so we think probably about 9%, 10% upside in earnings growth next year around 240.
And we think that, that really occurs as companies remain remarkably adept at navigating an environment with advanced technology, whether it's to curb costs to improve logistics, manage logistics, or manufacturing processes.
And we think that the earnings will take us-- that makes our multiple on that 5,200 target about 21.7 times where we stand now on a forward basis, but likely more attractive, a little bit less than that by year end next year.