BMO Capital Markets continues to project a bullish trend for US stocks until the end of 2023, maintaining its year-end S&P 500 target at 4,550. This suggests a potential further increase of 5.3%. The forecast is driven by robust Q3 earnings and a less aggressive approach to interest rates. A more ambitious target of 5,050 set by BMO would require substantial developments like a Federal Reserve rate cut.
The S&P 500 demonstrated resilience this week with a 4.9% rise, recovering from a 7% fall experienced during September and October. This recovery has been attributed to strong Q3 earnings and moderate interest rate strategies.
The Federal Reserve, led by Chairman Jerome Powell, decided against an interest rate hike at the meeting held on November 1. This decision was made in light of market-determined higher long-term rates, which rendered additional hikes unnecessary.
Despite concerns over rapid economic growth potentially destabilizing the economy, optimism remains due to the resilience of the labor market and robust consumer spending strength.
BMO Capital Markets' list of top-performing US large-cap stocks features 15 companies that have seen a combined rise of 25.5% over the past year. This performance more than doubles the S&P 500's growth of 12.1%. These stocks are expected to outperform projected market averages, contributing to BMO's optimistic outlook for US stocks until the end of 2023.
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