According to Carson Group chief market strategist Ryan Detrick, the S&P 500 is expected to reach record highs in 2024 as the second year of the bull market begins. Detrick predicts that rising profit margins and increased corporate earnings will serve as tailwinds for stock prices, leading to a significant gain in the S&P 500. If a recession can be avoided, Detrick believes there is a high likelihood of low double-digit returns for the index, potentially reaching around 4,800 points.
Detrick finds encouragement in the fact that payrolls and incomes are still growing at a healthy rate compared to pre-pandemic trends. He believes that steady economic growth will contribute to record profits for companies in 2024, which historically leads to increased stock prices.
In addition to solid fundamentals, the technicals of the stock market are also favorable. Detrick notes that election years for first-term presidents have historically been strong, with an average S&P 500 gain of 12.2%. He also highlights an ultra-rare and reliable technical signal that recently occurred, known as the Zweig Breadth Thrust Indicator. This indicator has only flashed 17 times since 1945, and each time stocks were higher one year later, with an average gain of 23%.
Detrick concludes by stating that the potential for a more than 23% gain in the S&P 500 one year later is something that should not be ignored.
Overall, Detrick's analysis suggests that the stock market is poised for continued growth in 2024. The combination of strong fundamentals, positive technical signals, and historical trends indicates the potential for record highs and double-digit returns in the coming year.