RBC Capital lifted its year-end target for the S & P 500 as the tech-led market rally continued, seeing double digit gains for 2023. The Wall Street firm's head of U.S. equity strategy Lori Calvasina raised her S & P 500 forecast for the end of 2023 to 4,250 from 4,100, her prior target dating from 2022. The new target is only about 1% higher than S & P 500's Friday close if 4,205.45 but it would represent a 10% gain for the year.
One of the reasons for the higher target is its new election cycle test, which bakes in the average S & P 500 return of 16.3% in third years of a presidential cycle. "We decided to make this switch based on some interesting trends we are seeing in polling and betting market data, which we think have gone unnoticed because of all the focus on the debt ceiling recently," Calvasina said.