At this time of year, top Wall Street strategists release forecasts for U.S. stock market performance and the American economy in the coming year. This year, while top institutions are divided on whether the U.S. economy will fall into recession, most strategists still expect earnings per share (EPS) of S&P 500 component companies to grow in 2024. As of last Friday's close, the S&P 500 stood at 4594.63 points, with a year-to-date gain of nearly 20%. Below is a summary of Wall Street's 2024 S&P 500 forecasts, including key highlights from strategists' comments. JPMorgan Chase: Projected year-end S&P 500 target at 4200 points, with EPS of $225. As economic growth slows next year (U.S. GDP growth will drop to 0.7% in Q4 2024 from 2.8% in Q4 2023), household excess savings and liquidity are eroded, and credit conditions tighten, JPMorgan Chase believes the consensus forecast of 11% EPS growth in 2024 is unrealistic. Negative corporate sentiment should serve as a catalyst for significant downward earnings revisions early next year. Morgan Stanley: Projected year-end S&P 500 target at 4500 points, with EPS of $229. Near-term uncertainties should give way to earnings recovery. Morgan Stanley's 2024 EPS estimate ($229) aligns with the predictions of its leading earnings model, which shows corporate earnings growth will rebound next year, a view shared by Morgan Stanley's economists. On the valuation front, Morgan Stanley expects the forward price-to-earnings (P/E) ratio to hit 17.0 times by the end of next year. Wells Fargo: Projected year-end S&P 500 target at 4625 points, with EPS of $235. Amid low volatility, tight credit spreads, a stock market rally, and rising/volatile funding costs, it is time for the U.S. stock market rally to slow. The S&P 500 is expected to see volatile trading and finish essentially flat in 2024, as valuations limit upside while interest rate uncertainty adds downside risks. Goldman Sachs: Projected year-end S&P 500 target at 4700 points, with EPS of $237. Goldman Sachs' baseline assumption for next year is that the U.S. economy will continue to expand at a moderate pace, avoiding a recession, and the S&P 500 valuation will hit 18 times, close to the current P/E level. Barclays: Projected year-end S&P 500 target at 4800 points, with EPS of $233. The rollercoaster ride of 2023 has proven this cycle is far from normal, and Barclays expects U.S. stocks to deliver single-digit returns next year as slowing inflation is offset by moderate economic deceleration. Bank of America: Projected year-end S&P 500 target at 5000 points, with EPS of $235. The equity risk premium may decline further, especially for tech stocks: Investors have already weathered the biggest macroeconomic uncertainties. The market has absorbed major geopolitical shocks, and the good news is that bad news is already being priced in. Macro signals are mixed, and Bank of America's bullish view is not based on expectations of Fed rate cuts, but rather on what the Fed has already achieved. Corporations have adapted and become accustomed to higher interest rates and inflation. Deutsche Bank: Projected year-end S&P 500 target at 5100 points, with EPS of $250. Deutsche Bank does not believe U.S. stock valuations are overly stretched. If inflation returns to 2% as economists predict, which is priced in across all asset classes, and the dividend payout ratio remains high, Deutsche Bank expects the S&P 500's P/E ratio to range between 16 and 20 times, the level seen over the past two years. If earnings growth continues to rebound as Deutsche Bank forecasts, valuations will remain well-supported. In addition, below is a partial summary of Wall Street's 2024 forecasts for U.S. GDP and inflation. JPMorgan Chase: "While the U.S. economy clearly managed to avoid a recession this year, we believe the risk of a recession in 2024 remains elevated. The fading of post-pandemic tailwinds, intensifying monetary headwinds, and reduced fiscal offsets should all help keep growth below trend, and we forecast U.S. real GDP will grow by 0.7% over the next year." Morgan Stanley: "Prolonged high interest rates will create a sustained drag, not only offsetting fiscal stimulus but also pushing economic growth consistently below potential starting from Q3 2024. We still believe the Fed will achieve a soft landing, but slowing economic growth will keep recession concerns alive. We forecast U.S. GDP growth will slow to 1.6% in 2024 from 2.5% in Q4 2023 (with a year-over-year growth rate of 2.4%)." Wells Fargo: "Some cracks have begun to appear in the economy, and these pressures may intensify in the coming months as monetary tightening continues. Our baseline forecast is that the U.S. real GDP will see a moderate contraction starting from mid-2024." Goldman Sachs: "The hardest part of fighting inflation is behind us, and core inflation should fall back to 2.2% to 2.5% by the end of 2024. With the more daunting issues largely resolved, the conditions are in place for inflation to return to target levels, and the worst impacts of monetary and fiscal tightening have already passed. We now believe the historical average probability of a recession in the next 12 months is only 15%." Bank of America: "We believe a soft landing for the U.S. economy in 2024 — a period of sustained growth but at a rate below historical trends — is the most likely scenario." © 2021 Meishun (Hong Kong) Management Consulting Co., Ltd. and Meishun (Hangzhou) Management Consulting Co., Ltd. All rights reserved. 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