Join the bullish camp on US stocks! Bank of America predicts that the S&P 500 index will reach a new high of 5000 points next year.

Zhitong App has learned that in a report, strategists at Bank of America stated that the S&P 500 index will reach a new high in 2024, citing the reason that US companies have adapted to higher interest rates and withstood the impact of the macro economy.

Led by Savita Subramanian, the strategists at Bank of America are optimistic about the US stock market next year, "not because we expect the Federal Reserve to cut interest rates, but because the Federal Reserve has already achieved results," they wrote in the report. "The market has absorbed significant geopolitical shocks. US exceptionalism remains intact."

They predict that by the end of 2024, the S&P 500 index will close at a record high of 5,000 points, 10% higher than Monday's closing price. The strategists at Bank of America stated that next year will be a "paradise for stock pickers."

Subramanian's optimistic view echoes the views of Wall Street giants, including David Kostin of Goldman Sachs and Manish Kabra of Societe Generale, who all believe that the S&P 500 index will approach historical highs. Barclays strategists expect the stock market to outperform the bond market. Even Michael Wilson of Morgan Stanley, a staunch bear on US stocks, has become more positive about the benchmark index for next year.

So far this year, the S&P 500 index has risen by 18%, as the market's confidence in the Federal Reserve's quick end to rate hikes has increased amid the resilience of the economy. Additionally, the profit outlook for companies has remained stable after a profit decline in the third quarter earnings season, the first since the end of the COVID-19 pandemic.

The strategists at Bank of America pointed out that their analysts' survey shows that one reason for their optimism is that the US economy is in a stable environment, neither overheating nor cooling down. Subramanian stated that even if economic growth slows, corporate profits may accelerate.

In another report this week, Stephen Suttmeier, a technical strategist at Bank of America, also stated that as US stocks approach decisive bullish levels, the stock market has "greater upside potential." He stated that institutional asset management companies have more "buying power" to deal with the year-end rally. However, Goldman Sachs strategists warned that the recent rally has increased the risk of disappointing short-term trends.

Subramanian concluded by adding that data shows that most investors still hold a generally pessimistic attitude. According to a report on November 21, "bull markets usually end with high confidence and excitement—we are still far from that."