Morgan Stanley analysts forecast S&P 500 index to reach 5000 points by the end of 2023
Morgan Stanley analysts predict that the S&P 500 index will rise to 5000 points by the end of 2023, which is a very optimistic scenario for the American stock market. This forecast is based on several factors that support stock growth and stimulate investors.
Firstly, the growth of corporate earnings and infrastructure spending in the US will be the main driving force for the stock market. Increased investment in infrastructure and business development contribute to the profitability of companies, which can have a positive impact on the US stock market.
Secondly, the growth of social and infrastructure spending in the US will also contribute to stock growth in the fourth quarter. Increased spending on social programs and infrastructure projects create additional opportunities for companies and stimulate investors.
Furthermore, investments in accordance with inflation, chips, infrastructure, and job laws will stimulate the stock market. This means that companies in these industries will be a priority for investors.
However, despite optimistic forecasts, the US stock market showed a negative trend in August 2023, decreasing by 2-2.6%. Such a decrease may be attributed to factors such as investor bearish sentiment and a preference for fixed-income instruments over stocks. Some investors prefer to avoid risks and choose less volatile investments.
Nevertheless, stocks of some large companies, such as Apple, Amazon, Alphabet, Meta, Microsoft, NVIDIA, and Tesla, continue to be in demand in the market. These companies are considered less susceptible to geopolitical risks and have good growth prospects. Some of them are even trading below their 2021 closing levels, making them attractive to investors.
For example, NVIDIA stocks are an exception as they have significantly grown compared to last year due to the AI boom. Stocks of Alphabet, United Rentals, and CRH also appear attractive for purchasing, according to Andrew Slimmon’s (Senior Portfolio Manager and Managing Director of Morgan Stanley Investment Management) forecast, and have growth potential in the future. Analysts predict an average growth potential of 14.5% for Alphabet stocks, 10% for United Rentals stocks, and nearly 18% for CRH stocks.
Analytical conclusion:
Morgan Stanley analysts forecast a growth of the S&P 500 index to 5000 points (approximately 11% growth potential from the current level) by the end of 2023. They also point out the undervaluation of stocks, which will intensify by the end of the year, and that the growth of social and infrastructure spending in the US will support the US stock market in the fourth quarter. Stocks of Apple, Amazon, Alphabet, Meta, Microsoft, NVIDIA, and Tesla continue to be in demand among investors, and investments in Alphabet, United Rentals, and CRH companies have growth potential in the near future. However, investors should consider possible risks and base their decisions on fundamental data and their investment goals. With the right approach and diversification in the portfolio, investors can take advantage of growth opportunities and achieve successful results in the stock market.
