FOMC meeting minutes: S&P 500 seen hitting the 5,400 level in 2024

February 21, 2024 11:05 AM PST | By Invezz

FOMC meeting minutes: S&P 500 seen hitting the 5,400 level in 2024 — Image source: Invezz

Officials remain cautious of cutting rates too soon

Officials expressed optimism on the progress made on inflation but viewed part of it as “idiosyncratic” and related to factors that may not last.

They found it appropriate, therefore, to hold back on easing policy until they have more confidence that inflation indeed was receding.

Still, Jonathan Golub – the head of U.S. equity strategy at UBS is convinced the S&P 500 will hit the 5,400 level in 2024.

He raised his earnings estimate for this year in a research note today to $240 and said “despite our bullish outlook, it appears we were not bullish enough”.

Note that the benchmark index is already up some 6.0% versus its year-to-date high at writing. Watch here: https://www.youtube.com/embed/6Oi0Kndlwt4?feature=oembed

Why is UBS now more bullish on the S&P 500 index?

Last week, the U.S. Bureau of Labour Statistics said inflation was up 3.1% in January – versus a 2.9% increase expected as Invezz reported here.

If the signal from last week's US price data is confirmed in the months ahead — that is, getting to the #FederalReserve’s 2% #inflation target may be more challenging than many expect — policymakers, economists, and market participants may be forced to confront an inherently… — Mohamed A. El-Erian (@elerianm) February 20, 2024

Still, Golub of UBS is confident that “these demand-driven readings are constructive for future returns”. Recent economic data, he added, suggests the consumer is keeping resilient and the U.S. economy continues to thrive.

The strategist is particularly bullish on healthcare for defensive investments and expects banks and finance to benefit as well from a relaxed lending criteria and a potential rebound in M&A (mergers and acquisitions) in 2024.

Earlier this week, Goldman Sachs also raised its year-end target for the benchmark S&P 500 index to 5,200. That suggests another 5.0% upside from here.

The post FOMC meeting minutes: S&P 500 seen hitting the 5,400 level in 2024 appeared first on Invezz

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