S&P 500: New Record in Mid-2024 - JPMorgan

This year, September could be the most detrimental month for the stock market.

Since the start of the month, the S&P 500 index has seen a decrease of over 4%.

JPMorgan is predicting that the S&P 500 will reach a new record high by mid-2024.

The S&P 500 stock index could potentially experience its worst month since December of last year in September.

Stocks are being sold off by investors in anticipation of a long period of high interest rates, while the U.S. dollar has risen to its highest level in 10 months and U.S. Treasury yields have reached multi-year highs.

The FxPro analyst team stated that the aversion to risks, including those associated with equities, has been exacerbated by the discord over the budget, which could lead to a US government shutdown. Additionally, Federal Reserve officials have been emphasizing the potential for additional rate increases, while news outlets have been emphasizing the dire financial situation of many Americans.

FxPro predicts that the S&P 500 could decline to the 4200 area, where the 200-day moving average is located and was an important resistance area from May 2022 to June 2023, due to a full 61.8% Fibonacci correction from the rally over the past 12 months.

Morgan Stanley believes that a recession in the United States is unavoidable, and that the S&P 500 index could drop to 3,900 points by the end of the year. Furthermore, they anticipate that inflation could increase and the Federal Reserve will maintain high interest rates.

JPMorgan anticipates that the Fed's decision to reduce rates will be beneficial for the stock market, leading to a new high for the S&P 500 in the coming year.

It is anticipated that the index will reach a record high of 4,796 by mid-2024, a 12% increase from current levels, due to robust consumer demand in the US and a probable soft landing of the economy. The rally will be supported by these factors.

Futures on the Federal Reserve's interest rate currently suggest a 40% chance of a rate cut in June 2024 and almost 88% in July.