Top Wall Street bull sounds the alarm on one of the biggest risks for the stock market in 2024

Tom Lee

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  • Wall Avenue’s prime bull highlighted two huge dangers that might upend the inventory market in 2024.

  • Fundstrat’s Tom Lee stated a tough touchdown within the economic system and a parabolic melt-up within the inventory market are dangers to observe. 

  • “If we’ve got a parabolic transfer in December and we find yourself at S&P 5000 by  December 31, you’ve got pulled ahead plenty of the positive factors for 2024,” Lee stated.


Certainly one of Wall Avenue’s greatest bulls highlighted the 2 huge dangers that might derail the inventory market subsequent yr.

Fundstrat’s Tom Lee, who has one of many highest S&P 500 value goal for 2024 at 5,200, advised CNBC on Thursday {that a} exhausting touchdown within the economic system and frothy buying and selling motion may result in a risky inventory market subsequent yr.

Lee stated that he expects the US economic system to proceed to develop in 2024, with PMI’s more likely to flip greater partly due to the Federal Reserve signaling that it’ll shift from hawkish rate of interest hikes to dovish rate of interest cuts in 2024.

However a tough touchdown within the economic system may nonetheless materialize if different nations do not rebound from their present financial stoop.

“You want a world flip, so China and Europe should emerge from this stagnation, and if [they] do not perhaps we speak about a tough touchdown,” Lee stated.

China particularly has been affected by financial malaise for the reason that authorities eased COVID-19 restrictions. A mixture of excessive youth unemployment, difficult demographics, and a crumbling actual property market has put stress on the second largest economic system on the earth.

The second danger to Lee’s bullish view is a melt-up within the inventory market between now and the tip of December.

“The second [risk] is that if we’ve got a parabolic transfer in December and we find yourself at S&P 5000 by December 31, you’ve got pulled ahead plenty of the positive factors for 2024, so the primary half [of 2024] might be fairly unhealthy,” Lee stated.

The S&P 500 traded at 4,717 on Friday, about 5% away from 5,000.

Since October 27, the S&P 500 has surged 14%, the Nasdaq 100 is up 17%, and the Russell 2000 is up 22%. In the meantime, the Dow Jones Industrial Common surged to an all-time excessive this week, whereas the entire different main indexes are inside spitting distance of a brand new report excessive.

Such sharp strikes greater within the inventory market in such a brief time period may result in an area prime that requires months of consolidation earlier than additional positive factors will be had, and that is the precise fear on Lee’s thoughts.

Learn the unique article on Enterprise Insider

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