Take Societe Generale’s Manish Kabra, who boosted his year-end target last week on the index to 4,750 from 4,300 — 25% above his original call of 3,800 heading into 2023. Or Piper Sandler & Co.’s Michael Kantrowitz and BNP Paribas SA’s Greg Boutle, who at 3,225 and 3,400 had held the lowest targets among sell-side forecasters. They were cornered into lifting their 2023 outlooks in recent months just to keep up with the 16% rally.
While strategists have largely capitulated on their forecasts for 2023, they aren’t quite ready to turn into bulls. Kaba, for example, expects the S&P 500 to fall to 3,800 by the middle of next year, driven by a consumer-spending crunch. It closed Friday at 4,450. A slew of Wall Street strategists have been forced to ratchet up their forecasts as stocks extended their climb this year. Bank of America Corp.’s Savita Subramanian, Goldman Sachs Group Inc.’s David Kostin and Citigroup Inc.’s Scott Chronert also boosted their 2023 outlooks in recent months to keep up with the rally.
The main question vexing much of Wall Street at this point may be how long the Fed will keep rates this high, if it actually is done hiking. Economists surveyed by Bloomberg expect officials to keep rates in the 5.25% to 5.5% range at their Sept. 19-20 meeting, and the first cut to come in May – two months later than the economists’ view in July.
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