Wall Street's 2024 bets
- This post originally appeared in the Insider Today newsletter.
Welcome back! It's crunch time if you're still looking for Christmas gifts, so here's our guide to 42 thoughtful last-minute gifts. Or just head to Costco like one BI editor who got everything she needed for under $250.
In today's big story, we're looking at 2024 market predictions from over a dozen Wall Street firms.
What's on deck:
- Markets: Pain is coming for private equity.
- Tech: This supercomputer launching next year could bring us one step closer to cyborgs.
- Business: Meet Ukraine's real power broker making key decisions amid its war with Russia.
But first, let's make some predictions.
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The big story
There's an old joke about Wall Street's annual predictions: Just add 10% to the current market and call it a day.
In reality, there's a bit more nuance to the process. But there's no denying speculating where the market will be a year from now is a bit of a crapshoot.
But that doesn't stop people from trying. Business Insider's Matt Fox compiled predictions from 14 Wall Street firms about where the markets are headed.
As is often the case, analysts are overly bullish about 2024. Most firms (9) have a bullish take on where the S&P 500 will be by the end of next year. Three firms, including Morgan Stanley and Goldman Sachs, have a neutral view of the market in 2024.
Meanwhile, BCA Research and JPMorgan are the only ones that see things getting worse before they get better.(You can get a summary of all their predictions here.)
While Wall Street is largely optimistic about the market's chances, there is still a wide range of opinions.
The most bearish and bullish takes in Matt's roundup are a world apart. BCA Research set an S&P 500 price target of 3,300, while Yardeni Research sees the S&P hitting 5,400 by the end of 2024.
So, how can two sides see things so vastly differently?
For BCA Research's outlook, the belief is that high interest rates will continue to take their toll on the market. Even if the Fed cuts rates, it likely won't be enough. They say any policy adjustment will come after the summer, and things will already be headed downward at that point. "Cracks" are already appearing in the job market, and a default cycle could be on the horizon.
(It's worth noting that the firm's prediction was made before the Fed's comments about projected cuts in 2024.)
And then there's Yardeni Research, where the sky is essentially the limit for the market in 2024.
Ed Yardeni sees the S&P 500 rising 17% thanks to what he calls the "Roaring 2020's." The thesis is that artificial intelligence will supercharge productivity and efficiency, equalling big gains in profitability for companies.
Your Monday headline catchup
A quick recap of the top news from over the weekend:
Rudy Giuliani can't make his $148 million defamation judgment go away even if he can't pay
Elon Musk has started a war with Tesla workers that he's unlikely to win
US Navy fights off barrage of 14 drones in Red Sea fired from Yemen as 'global trade problem' looms
HENRYs are turning to a little-known and risky type of mortgage as home prices soar
The candidate NY Republicans chose to replace George Santos has been a registered Democrat for more than a decade
3 things in markets
The dramatic comedown of Wall Street's buyout kings. After an incredible run, high interest rates have proven to be a thorn in the side of private equity's debt-laden business model. As a result, the next few years will be messy for PE firms and their portfolio companies.
Here's what a fund manager up 55% this year is betting on. Baron Fifth Avenue Growth Fund has had incredible success this year. The firm is looking to continue its winning streak with a combination of high-profile (Nvidia) and lesser-known names (TradeDesk). More picks here.
Larry Summers sounds off. The former treasury secretary shared his views on what he'd do differently at the Fed and the odds of a soft economic landing. These are some of his best quotes.
3 things in tech
The world's first supercomputer that rivals the human brain's speed will go live next year. It's called DeepSouth and is being developed by Western Sydney University. The hope is to better understand how brains can use such little power to process huge amounts of information.
How to use Grok — Elon Musk's rival to OpenAI's ChatGPT. The chatbot is now available to certain users of X. It's a spicy rival to ChatGPT that is trained off X posts and speaks with sarcasm.
AI companies are split on how much power to give CEOs. OpenAI and Anthropic both have measures to limit the CEO's ability to make big decisions. Meanwhile, Cohere embraced a more traditional structure that puts the founders firmly in control.
3 things in business
Ukraine's real power broker. After Russia's invasion, the generation of oligarchs that enjoyed free rein to plunder Ukraine's economy was largely destroyed. But now, a new system of well-connected people is maneuvering to exert control over a large swath of Ukraine's economy, law enforcement, and security apparatus.
Top investors name the 25 healthcare startups set to take off next year. As investment activity dwindles, VCs are holding startups to high standards. Their top healthcare startup picks include companies that free up nurses' time, provide behavioral healthcare, and bring telehealth to Gen Z.
The top 32 managers and agents helping athletes forge careers in media and entertainment. Launching podcasts. Building influencer businesses. Creating production companies. Athlete storytelling is booming, and these are the agents and managers making it happen.
In other news
Costco gold bars were a hot holiday buy — while they lasted.
Lyft President Kristin Sverchek on 2024: "I'm excited to just move — I have a bias towards action."
What's happening today
The rocket launch window for Blue Origin opens. The Jeff Bezos-owned company plans to bring science and research materials into space.
It's International Migrants Day. The day is meant to "reflect on and celebrate the contributions of millions of migrants worldwide," according to the UN.
Happy birthday, Billie Eilish. Sia, DMX, Joseph Stalin, Brad Pitt, Christina Aguilera, and Keith Richards were also born on this day.
For your bookmarks
Overrated destinations
Martha Stewart told BI the five recipes everyone should learn how to make. From a couple of tasty pies to a simple salad vinaigrette, check them all out here.
The Insider Today team: Dan DeFrancesco, deputy editor and anchor, in New York City. Diamond Naga Siu, senior reporter, in San Diego. Hallam Bullock, editor, in London. Lisa Ryan, executive editor, in New York.