![S&P 500 will top 5,700 in second half of 2024, says Ned Davis Research 1 S&P 500 will top 5,700 in second half of 2024, says Ned Davis Research](https://www.trendfeedworld.com/wp-content/uploads/2024/06/SP-500-will-top-5700-in-second-half-of-2024.jpg)
According to Ned Davis Research, historic post-election market gains could push the S&P 500 even higher by year's end. Ed Clissold, the firm's chief U.S. strategist, raised his year-end S&P 500 target to 5,725 from 4,900. The new target suggests the broad market index could rise more than 4% from its current levels and would lead to a 20% gain by year-end. Although Ned Davis Research is not included in CNBC Pro's Market Strategist Survey, when comparing the price targets of several Wall Street names, the firm has the second-highest forecast for the broad market index. Clissold took three factors into account when reevaluating its year-end target: earnings per share and price-earnings growth, upcoming Federal Reserve rate cuts and the presidential cycle. He noted that since the end of World War II, the S&P 500 has averaged an average gain of 4.7% in the second half of election years. .SPX YTD mountain SPX year to date “Stocks rise next [an] election year, especially if [the] sitting wins,” Clissold wrote in a Thursday note. He added that the broad market is on track to post the second-best performance in the first half of an election year. He said market trends tend to be weaker in the first half of elections. “One possible explanation is that this is the first time since 1892 that the nominees of both major parties have occupied the White House, reducing uncertainty surrounding the primaries and potentially increasing the results of the year-end election rally” , Clissold said. the strategist raised his operating earnings per share growth forecast from 6.5% to 8.5%. He also expects the Fed to start cutting rates in December. The S&P 500 has risen an average of nearly 6% in the six months before an initial rate cut, meaning a December rate cut could benefit stocks in the second half of the year, Clissold said he thinks ” the positive cyclical story remains intact” into the second half of the year. Concerns about limited market breadth hinge on his optimistic outlook. “The rally has stretched valuations, turned bullish sentiment and left the market overbought,” Clissold said. “High valuations and declining leadership leave the market vulnerable to bigger declines if the bullish fundamental/macro backdrop falters.” The S&P 500's 14.5% gain year-to-date has largely come from high-flying tech names like Nvidia and Meta Platforms. Nvidia is up more than 150% this year, while Meta is up 40%. However, the equal-weighted version of the S&P 500 is up just 4% through 2024. With this in mind, he advised investors to “prepare for more defensive positioning” while maintaining an overweight position in equities. “The longer optimism remains high, the greater the risk that it turns into complacency and leaves the market vulnerable to the next negative news,” Clissold said.