Goldman Strategists Lift S&P 500 Forecast a Month After Setting It

Just one month after setting a 2024 target for the S&P 500, Goldman Sachs Group Inc. strategists increased their forecast as the year-end rally shows no signs of abating.

The Federal Reserve’s dovish pivot last week, along with lower consumer prices, is an outcome that will allow real yields to fall while supporting stock valuations, a team led by David Kostin wrote in a note. “Equities were already pricing positive economic activity but now reflect an even more robust outlook,” they said.

Kostin sees the S&P 500 at 5,100 points by the end of next year, joining Wall Street peers like those at Bank of America Corp. and Oppenheimer Asset Management in expecting a fresh high in 2024. The Goldman strategist raised his forecast by almost 9% from the 4,700 level he predicted in mid-November.

There is also a risk that his earnings forecast of 5% year-over-year growth in 2024 may prove too pessimistic, thanks to looser financial conditions that should boost economic activity and company profits, Kostin said. The strategist previously said his team was right in predicting that the S&P 500 would show no profit growth in 2023, but was wrong to say the index wouldn’t climb this year.

Wall Street's Crystal Ball