By
Steve Muchoki
April 16th, 2024
According to the Evercore executive’s projections, the worst-case scenario in growth terms for the S&P 500 is 3,575 points this year.
Evercore ISI’s Senior Managing Director of Equity, Derivatives, and Quantitative Strategy, Julian Emanuel is optimistic the S&P 500 (INDEXSP: .INX) can soar to new heights this year, riding on a similar growth record that characterizes the Dot Com bubble era. Speaking on CNBC’s Fast Money, Emanuel said an emotionally charged public could push the value of the S&P 500 to a new All-Time High (ATH) of 5,509 this year.
“They really haven’t committed sort of every last dollar in the way that was the case in ’99 and ’00,” the firm’s senior managing director of equity, derivatives and quantitative strategy said Monday. “If you get that kind of emotion, particularly if the pandemic turns endemic at mid-year, that’s how you get that kind of overshoot.”
From the projected growth mark, the S&P 500 is expected to grow as high as 18% this year, and by 8% from the earlier projection of 5,100 that Emanuel professed. The S&P ended Monday’s session down 0.14% to 4,670.29, coming off a streak of days in red. The broader index attained an all-time high of 4,818.62 last year, amidst the few gains picked up before the market downturn sets in.
“We’ve seen very vigorous participation for the last year and a half without actually the concurring emotions that you tend to get with that kind of participation,” he said.
S&P 500 and Market Growth Hinges on Stability Assurance
The potentials for the S&P 500 to grow to the predicted highs, and in fact, the broader market is hinged on the potential stability assurances that can be given by the Federal Reserve and other key drivers of the economy. The stability guarantees revolve around affirmations that attempts will not be made to derail market rallies with erratic interest rate hikes.
“Ultimately to get stock prices to move to those kinds of extremes on the upside through our price target, you’re going to need a perception that inflation is going to moderate,” he said. “We actually do think it moderates later in the year, but stays high for an extended period.”
According to the Evercore executive’s projections, the worst-case scenario in growth terms for the S&P 500 is 3,575 points this year. Drawing on his previous research notes, Emanuel believed this currently prolonged pandemic, as well as a potential debt and spending “hangover”, takes similarities to the period after World War I and the 1918 flu epidemic.
Amidst the current uncertainties rocking the market, for now, Emanuel is still a fan of value over growth stock and believes the Nasdaq Composite (INDEXNASDAQ: .IXIC) may be at a disadvantage this year amidst rising valuation and increasing interest rates. Amongst his top stock picks to back includes financials, healthcare, and industrials which is billed to benefit from the easing of pressures on the supply chain.