Is the S&P 500 destined to soar or stumble? RBC Capital Markets just made a bold call that’ll have every investor on edge.
In a move that’s turning heads, RBC Capital Markets has raised its year-end 2024 target for the S&P 500 from 5,300 to 5,700. But hold on—this “nervous raise” suggests there’s more to the story than meets the eye.
Lori Calvasina, RBC’s head of global equity strategy, described this bold move as “a nervous raise.” Here’s why every savvy investor should pay attention.
What’s Driving the Nervous Raise?
Valuation and Sentiment: Calvasina noted that the stock market has gotten ahead of itself from a valuation perspective. Sentiments are showing signs of over-optimism, which could spur a pullback of 5-10%. But don’t panic—this is expected to be temporary.
Uncertainty in Outlook: Significant uncertainty looms over the second half of 2024 and beyond. Economic forecasts could swing the market depending on US consumer behavior and the upcoming presidential election.
US Economic Soft Patch: As the US economy edges into a soft patch, increased stock market volatility is expected—especially during presidential election years. While a major downturn isn’t on the horizon, there’s still a risk of a temporary correction if economic forecasts sour.
Expert Take on the Future
Lori Calvasina shed light on the decision:
“The stock market has gotten a bit ahead of itself from a valuation perspective…but…the S&P 500 could move a little bit higher between now and year-end.”
Lori Calvasina
“Any pullback will end up being a pothole on the path to recovery…”
Lori Calvasina
RBC’s cautious stance is reflected in their description of themselves as “nervous and jumpy bulls,” acknowledging substantial market risks while still seeing room for growth.
Key Numbers You Need to Know
The new target has several implications:
| Category | Key Data |
|---|---|
| Year-End Target | RBC’s year-end 2024 target for the S&P 500 increased from 5,300 to 5,700 |
| Potential Range | S&P 500 could end the year at 5,200 (based on valuation models) or exceed 5,800 (based on cross-asset and political models) |
| Projected Performance | 19.5% gain from December 2023 close and a 4.4% rise from June |
| Risk Assessment | Near-term pullback of 5-10% possible but temporary |
| Outlook Uncertainty | High, especially around the US consumer and presidential election |
| Potential Downside | Risk of a downturn if economic forecasts worsen |
| Long-term Outlook | Median outcome of 6,159 for S&P 500 in 2025, range from 5,900 to nearly 6,400 |
What This Means for Investors
RBC’s revised target is a wake-up call for every investor. While short-term volatility might rear its head, the models suggest growth is still in the cards.
Intelligent investing will be crucial. Ignore the froth, brace for the bumps, and stay informed. RBC’s cautious optimism is a reminder that the path to gains is often winding but worth the journey.
Stay tuned and navigate these market moves with the savvy and confidence you deserve.