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JPMorgan sees 8% downside risk for S&P 500 next year

Published Nov 30, 2023 06:32AM ET
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© Reuters. JPMorgan sees 8% downside risk for S&P 500 next year
 
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JPMorgan Chase equity strategists continue to stand apart with a notably pessimistic outlook amid a wave of Wall Street strategists forecasting all-time highs for U.S. stocks in the coming year.

JPMorgan predicts the S&P 500 Index will decline to 4,200 by the end of 2024, indicating an approximately 8% drop from its current level.

Absent rapid Fed easing, analysts expect a more challenging macro backdrop for stocks next year with softening consumer trends at a time when investor positioning and sentiment have mostly reversed,” the analysts said in a note on Wednesday.

In addition to softening consumer trends, the strategists also listed decelerating global growth, shrinking liquidity, geopolitical and political risks, and elevated valuations as significant headwinds facing risk assets.

“Equities are now richly valued with volatility near the historical low, while geopolitical and political risks remain elevated. Analysts expect lackluster global earnings growth with downside for equities from current levels,” they added.

“For S&P 500, analysts estimate earnings growth of 2-3% next year with EPS of $225.”

Along these lines, JPMorgan continues to recommend a more defensive stance within styles and sectors due to potential downside risks to corporate profits.

“While it is difficult to pin down the start date and depth of a recession ahead of time, analysts think it is a live risk for next year even though investors are not pricing in this uncertainty consistently across geographies, styles, and sectors yet,” the strategists concluded.

JPMorgan sees 8% downside risk for S&P 500 next year
 

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Comments (12)
Jerry Pham
Jerry Pham Nov 30, 2023 4:47PM ET
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I see it keep gging up trend line
Brad Albright
Brad Albright Nov 30, 2023 3:56PM ET
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Stenography at its finest.
Nov 30, 2023 11:42AM ET
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12% downside till end of year
rajesh vairale
rajesh vairale Nov 30, 2023 11:29AM ET
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hopeless
Gary Piccone
Gary Piccone Nov 30, 2023 11:08AM ET
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JP Morgan has a month for their 2023 recession prediction
Casador Del Oso
Casador Del Oso Nov 30, 2023 10:29AM ET
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Why would they warn us ahead of time? They should sell now and short.
Daniele Folegnani
Daniele Folegnani Nov 30, 2023 9:35AM ET
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8% a year is almost the average gain of sp500, I do not think it will happend in 24 when rates starts to go down, as with bond yields. there is no big credit risk and p/e is around 20. Sure almost 30% of sp500 is tech, so expect volatility, but i see a decent grow next year, around 5.
Tom Saltzman
Tom Saltzman Nov 30, 2023 8:54AM ET
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8% is nothing. One real bad day.
Luke Knoep
Luke Knoep Nov 30, 2023 8:48AM ET
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Run for the hills
Taylor Huddlestun
Taylor Huddlestun Nov 30, 2023 8:27AM ET
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Finally, not some bandwagon analyst. The American people are struggling financially. One of three things has to happen. Either Americans stop spending, Businesses give 10% pay raises, or credit card debt gets erased. None of which are good for the economy.
Thomas Kahl
Thomas Kahl Nov 30, 2023 8:27AM ET
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Was there any time when people weren‘t struggle financially?
 
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