Bank of America (BofA) predicts that the S&P 500 could surpass 5400 based on its performance in January and February.
BofA analysts note a 1.6% rally in January and a 5.2% gain in February, triggering a bullish signal for 2024.
Historical data since 1928 indicates that when the S&P 500 is positive year-to-date through February, the year ends positively 80% of the time with an average return of 13.8% (S&P 500 at 5420).
The period from March to December tends to be positive 78% of the time with an average return of 7.8% (S&P 500 at 5490).
In Presidential election years with similar conditions, the S&P 500 has been up 10 out of 11 times with average returns of 14.1% for the year (S&P 500 at 5440) and 8.2% from March to December (S&P 500 at 5510).
BofA’s analysis suggests that in years when the SPX trades higher in both January and February (as in 2024), the year is up 89% of the time with an average return of 15.6% (S&P 500 at 5510).
The March to December period is positive 86% of the time with an average return of 7.8% (S&P 500 at 5490) in such scenarios.
In Presidential election years with similar conditions, the S&P 500 has been up 100% of the time (7 out of 7 times) with average returns of 15.9% for the year (S&P 500 at 5530) and 9.6% from March to December (S&P 500 at 5580), according to BofA.
BofA’s chart analysis suggests that the cup and handle pattern favors an upside potential ranging between 5200 and 5600 for the S&P 500.
Updated year-end S&P 500 projections for 2024 from major firms.
UBS: 5,400
Barclays: 5,300
Goldman Sachs: 5,200
Oppenheimer: 5,200
Fundstrat: 5,200
RBC Capital Markets: 5,150
Citigroup: 5,100
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