S&P 500 Index target 4,600-4,800 in 2024
Per the report, Wells Fargo expects global earnings to be challenged in early 2024. They expect a rebound later in the year as the economy reaccelerates. Once investors begin to anticipate an economic and earnings recovery, they expect the S&P 500 to gain into the end of the year.
Also Read: S&P 500 Likely To ‘Test The 5,000 Level’: JP Morgan On Where To Allocate In 2024
“Valuations likely will increase in 2024 as markets anticipate an earnings recovery into 2025” said Darrell L. Cronk, president of Well Fargo Investment Institute and the CIO of Wealth & Investment Institute.
Large-Caps Over Mid-Caps
At times when earnings per share (EPS) is decelerating and the economy is slowing, Wells Fargo favors quality and a more defensive posture within equities. Given their expectations with the earnings challenge in early 2024, Wells Fargo would prefer to allocate into U.S. large-caps over mid-caps and small-caps.
They have a year-end 2024 target for the MSCI EAFE Index of 2,000-2,200.
The MSCI EAFE Index follows the performance of large and mid-cap companies in 21 developed market countries globally, representing regions of Europe, Australasia, and the Far East. Notably, it excludes companies from Canada and the U.S. The iShares MSCI EAFE ETF (NYSE:EFA) is a popular ETF that tracks the performance of the MSCI EAFE Index.
3 ‘Favored Sectors’
In terms of sector picks, Cronk calls out Health Care, Industrials, and Materials as Wells Fargo’s “favored sectors.” Some popular exchange-traded funds tracking these sectors respectively are:
Consumer Discretionary and Real Estate count among the unfavorable sectors.
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