Deutsche bank see’s S&P at 5100

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Deutsche bank expects the S&P to end 2024 at 5100

Deutsche Bank strategists are optimistic about the S&P 500's future, predicting a surge to a record-breaking 5,100 by the end of year. The Bank also anticipates a "mild short" recession next year but still expects a 10% rise in earnings for S&P 500 companies.

The bank’s analysts also noted that they observe a historical pattern of rapid recoveries following sharp, short-lived selloffs and suggest that stocks might undergo a brief selloff in the event of a slowdown or recession.

Furthermore, the banks analysts pointed out the historical trend of equities rallying post-U.S. presidential elections. They identify the tight labor market as a significant upside risk, historically preceding periods of rapid productivity growth.

Analysts at Bank of America too predict the U.S. benchmark index to reach 5000 by the end of the next year. Markets are now pricing in the possibilities of a market rally in the month of December.

The S&P 500 has been hovering near 4,500 for two weeks after a rally was triggered by rate cut predictions for 2024. The theme has given markets momentum to drive up almost three weeks of consecutive gains.

From another angle point, it’s not certain that the end of the tightening cycle is here yet as in Powell’s last speech he gave up a few mixed signals and reiterated that economic indicators will be the catalyst for this decision, while several other Fed officials have remained dovish about rate cuts. But so far, the anticipation has given markets a jump-start to post weekly gains.