S&P 500 to Deliver Little Returns Into Early 2030s: Stifel

During periods of reflationary growth, value names in sectors like financials, energy and real estate tend to outperform along with small-caps and international equities, albeit with weaker overall U.S. stock returns at the index level, he said.

Contrarian, Other Projections

Bannister was one of a handful of sell-side forecasters to accurately make a contrarian call on the U.S. stock rally in the first part of 2023 and has since said gains would wane in the second half of the year.

That projection played out during a three-month slump in stocks that began in August until the S&P 500 roared back with a 9% advance in November.

His view once again makes Bannister an outlier heading into the new year.

Other Wall Street prognosticators have gotten more optimistic on U.S. stocks for next year, with firms including Bank of America Corp., Deutsche Bank AG, and RBC Capital Markets expecting the S&P 500 to hit an all-time high before 2024 closes out.

Despite the more upbeat calls, the average outlook remains guarded at only around 4,664, according to data compiled by Bloomberg.

JPMorgan Chase & Co. strategists are also skeptical, holding the most bearish outlook on U.S. stocks among their peers going into next year. They expect the S&P 500 to drop to 4,200 by the end of 2024.

“Crucially, unlike a year ago, when almost all economists and the market pricing had recession as a base case, both are in a soft-landing camp now,” a team at JPMorgan led by strategist Mislav Matejka said Monday in a note to clients. “Perhaps one should be contrarian yet again.”