After the US stock market fell from last month’s historical high, market sentiment hit a low point. Julian Emanuel, a quantitative strategist at investment bank Evercore ISI, predicts that the market will continue to decline in 2024.
S&P 500 is expected to drop another 6% this year, with the US election and the Federal Reserve being unfavorable factors for the market. Julian Emanuel further predicts that the target index price for S&P 500 by the end of 2024 will be 4,750 points, indicating that it will decline another 6% this year.
At the same time, Julian Emanuel believes that the stagnation of progress in combating inflation, uncertainty about the timing of interest rate cuts by the Federal Reserve, and the US presidential election in the second half of the year are all putting significant pressure on the stock market.
Julian Emanuel adds that the current monetary policy is more like a question mark and will become a catalyst for further decline in the stock market. He also expects that a “highly topical election” will shift consumer attention from “consumer spending” to “who to vote for.”
Although the market is bearish, investors still choose to buy at the low point. The US stock market has seen continuous declines for the fourth consecutive trading day since Wednesday (17), the first time since early January. Limited upside potential in the stock market, coupled with hawkish signals from the Federal Reserve, has significantly dampened market sentiment.
On the other hand, despite the decline in market sentiment, Julian Emanuel plans to buy when testing his target price for S&P 500 and sees it as a good buying opportunity at a low point. Julian Emanuel believes that one of the reasons for the excessive expansion of stocks in March is that market participants were optimistic about the record-breaking inflows of funds. Therefore, in the current environment, investors will moderate their optimism and make corresponding adjustments.