U.S. stock market also optimistic… "S&P500 could reach 8,000 next year"

Korea Economic Daily

Summary

Major institutions such as Oppenheimer Asset Management and Deutsche Bank said S&P500 could reach 8100 points and 8000 points respectively next year.
John Stoltzfus, an Oppenheimer researcher, predicted strength in cyclical stocks and consumer-discretionary stocks, noting significant upside potential.
Regarding tech stocks, forecasts that they will lead the market based on revenue growth diverged from analyses warning of risks from increased AI investment spending.

Opinions differ on which stocks will lead

Forecasts of "tech stocks driving next year"

Debate between cyclical stocks · consumer discretionary stocks

Wall Street investment firms were optimistic about a strong U.S. stock market next year. They were divided on whether AI-related stocks would lead the market as they did this year.

According to Reuters on the 12th, Oppenheimer Asset Management said in a report published on the 8th that the S&P500 index would reach 8100 points by the end of next year. It was the most optimistic forecast among major Wall Street financial firms, estimating there was room for a 17.37% increase compared with the closing price (6901 points) on the 11th (local time).

According to CNBC, the average S&P500 projection from Wall Street investment-strategy analysts was 7618 points. Among large investment banks (IBs), Deutsche Bank presented 8000 points, the second-highest figure after Oppenheimer. The most conservative IB was Bank of America (BoA), projecting 7100 points, about a 3% increase. John Stoltzfus, an Oppenheimer researcher, predicted, "Considering improved liquidity and the direction of fiscal policy, manufacturing with cyclical characteristics and consumer-discretionary stocks would deliver strong performance."

Opinions are divided over whether AI tech stocks that led the market this year will continue to be the main players next year. Andrew Tyler, a JP Morgan researcher, said, "Large tech companies will generate returns that outperform the market next year using revenue growth as their weapon," and, "I recommend constructing one pillar of the portfolio around tech stocks and increasing safety with sectors such as financials, materials, retail, and transportation." By contrast, Savita Subramanian, a BoA researcher, pointed out, "It will take time for tech firms to convert massive AI-related investments into profits," and said, "These companies risk entering an 'air pocket' (a temporary downturn) where spending increases but profits are limited."

Beomjin Jeon, reporter forward@hankyung.com