The S&P 500 recently crossed the milestone of 5,000 and shows no signs of slowing down.
With the momentum, Wall Street strategists are adjusting their forecasts, with Barclays leading the charge in optimism for even loftier heights.
Barclays, among those revising their predictions, has raised its year-end price target to 5,300 from 4,800. They believe earnings from Big Tech companies and a resilient US economy will fuel this upward adjustment. Interestingly, Barclays notes that the index could surpass their revised target.
Venu Krishna, Barclays’ head of US equity strategy, has highlighted the potential for the S&P 500 to reach a level of 6,050. This growth would be driven by tech giants’ continued outperformance and a broader recovery in earnings across sectors.
“On balance, we believe that risk/reward is tilted toward the bull case, as macro data suggest that the odds of an economic re-acceleration are beginning to outweigh the probability of even a mild recession, in our view,” Krishna wrote in a note to clients on Tuesday.
“If Big Tech extends its beat-and-raise streak and we assume ex-Tech negative revisions have bottomed, we could see the S&P 500 going to 6050 on $252 [earnings per share],” Krishna added.
Barclays is not alone in its outlook. Capital Economics and Yardeni Research also share similar optimism. Dr. Ed Yardeni, President of Yardeni Research, Inc., envisions the S&P 500 reaching 6,000 soon and potentially climbing higher in the coming years.
Yardeni is optimistic about the future due to the performance potential and increased productivity, especially in the technology industry. Despite expectations for technologies like AI, he believes that productivity improvements will continue to drive market growth.
Yardeni has a 5,400 target for the end of 2024 but sees the benchmark hitting 6,000 in 2025 and 6,500 in 2026. He views the US market as a top performer compared to growing economies like China, making it an appealing choice for investors.
“It looks like the US will continue to be an outstanding market, literally outstanding [and] standing out from everybody else,” Yardeni said. “And that’s a big part of the story for me and why I think the market can continue to move higher.”
With Barclays and other influential figures on Wall Street painting a bullish picture for the S&P 500, investors anticipate historic milestones as the index approaches the tantalizing milestone of 6,000.
