The strategist who called last year’s Rally sees the S&P climbing to 6,100

(Bloomberg) — The furious stock market run that has sent the S&P 500 soaring 20% ​​this year is far from over, according to BMO Capital Markets.

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Brian Belski, the firm’s chief investment strategist, raised his end-2024 forecast for the U.S. stock benchmark to 6,100 — the highest among Wall Street targets tracked by Bloomberg — from 5,600 previously. The S&P 500 closed at 5,618 on Wednesday, and Belski sees another 9% gain before the end of 2024. The market is already cooperating, with the index up 1.7% midday Thursday, putting it on track for a new record close .

Belski, one of the few fortune tellers to call the rally correctly last year, raises his prospects for the second time this year. Strategists’ average year-end target is about 5,523, according to data compiled by Bloomberg.

“We continue to be surprised by the strength of the market’s gains and have once again decided that something more than an incremental adjustment is warranted,” he wrote in a note to clients on Thursday.

Belski attributed his bullish outlook to the Federal Reserve’s move toward easing policy and market participation, which have improved beyond the so-called Magnificent Seven tech stocks, which until recently were the main drivers of the S&P 500.

Thursday’s rally comes after a dismal start to September, with the S&P 500 down more than 4% in the first week of the month and the Nasdaq 100 down nearly 6%. With traders encouraged by the Fed’s aggressive rate cut on Wednesday, the Nasdaq 100 rose 2.8%, while the small-cap Russell 2000 rose 1.8% and headed for a seventh straight winning session .

There have been only eight instances since 1950 when the S&P 500 gained between 15-20% in the first nine months of a year, and the average fourth-quarter return in those years was about 6%, according to BMO data. That’s about 50% higher than the average fourth-quarter return for all years.

Wall Street equity strategists were relatively quiet over the summer after raising their forecasts for the S&P 500 in tandem as U.S. stocks rallied in the first half of the year, with target increases from Goldman Sachs Group Inc. , UBS Group AG and Citigroup Inc. Now, BMO is the latest firm to upgrade its forecast for US stocks, after strategists at Deutsche Bank AG did so last week. After Belski, Evercore ISI strategist Julian Emanuel has the second highest S&P 500 forecast at 6,000.

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BMO expects a soft landing for the US economy and says the current market environment resembles the mid-1990s, when US stocks were able to sustain high multiples for years through the dot-com bubble. However, the firm stuck with its S&P 500 earnings per share estimate of $250 for 2024, indicating that “fundamental and macro supports have remained essentially the same.”

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