A note on Sunday from analysts at Bank of America on the US benchmark equity index S&P 500.

  • Expects further gains for the index this year
  • forecasts to 5,400 from 5,000 prior


  • Sell Side Indicator, our key sentiment gauge, has seen increasing equity allocations and is now firmly neutral (see SSI) and we lower its weight in our framework. But a neutral call is rarely correct, and the net message of our market timing framework is still, in one word, UP.

BoA outline 'realistic' bull and bear case calls:

The Bull case is a rally to 6,500

  • "lightly lower real rates (1.5%) and an ERP of the 80s/90s (2.5%), yielding a real cost of capital below 4ppt. Normalized earnings of $260 based on trough earnings in mid-2023 grown at trend 8% growth.

The bear case is S&P to 4,100

  • "lower real rates (1.0%) on economic weakness with a higher ERP (450bp) and normalized earnings of $225."
S&P 500 forecast 04 March 2024 2

The persistent rally has drawn more bullish forecasts: