Morgan Stanley’s Mike Wilson predicts the S&P 500 could see a 5% surge by the end of 2024, driven by fading election-related uncertainty and a market rally. Wilson believes the index could reach as high as 6,100, marking nearly a 5% increase from Tuesday’s closing level of 5,782.
“We’re entering the FOMO season,” Wilson said in a Monday interview with Bloomberg. “People need to perform in the next two months.” He noted that a clear event could push the index to around 6,000, though he cautioned that valuations are stretched, with the market currently trading at nearly 22 times earnings. This, along with the unlikely acceleration of growth, limits further upside potential.
Looking ahead to 2025, Wilson warns of increased uncertainty due to necessary fiscal consolidation, no matter who wins the U.S. presidential election. He predicts this will cause the market to fluctuate and warns that the rally may be short-lived.
“The market will find a new shiny toy to excite investors,” Wilson added, emphasizing the need for a fresh catalyst beyond the current dominance of tech stocks. While the S&P 500 has already risen over 21% in 2024, he suggests the market will need new themes to sustain growth beyond this year’s gains.