Another Wall Street bank raised its target at the S&P 500. Here's why.

But we chime in with the optimists for Tuesday, with A.J Call of the day From the Wall Street bank that beat its year-end forecast for stocks.

A team of strategists at UBS led by Jonathan Golub expects the S&P 500 SPX to end the year at 5,150 points from 4,850 points previously. Their forecasts from last year had warned that the odds were in favor of better appetite for stocks, with strong earnings, easing inflation and monetary policy and an improving economic backdrop.

“Given the Fed’s recent pivot, subsequent decline in interest rate expectations, and trend-beating in 2024 [earnings per share] “After revisions, we are now adopting this bullish scenario as our base case,” Golub and the team say. It is now higher than the wealth management arm of UBS, which recently raised its index target to 5,000.

The bullishness from the UBS strategy team comes at a time when stocks are off to a rocky start, with some concerned that investors, armed with overly optimistic expectations of the Fed raising interest rates, have piled too quickly into stocks. However, the S&P 500 remained just 0.27% off its January 2022 record close on Friday.

The bank's new S&P 500 target represents a 7.7% upside from here, as they also boosted their 2024-25 earnings per share estimates to $225 from $235 and $246 to $250, respectively.

“Importantly, our growth estimates of 6.3% and 6.4% over the next two years are lower than expectations of 11.4% and 12.8%. While dividends should pay
“For 2024 returns, lower interest rates should support progressively higher multiples,” Golub and his colleagues said.

The headquartered bank's new S&P 500 target puts it at the top of Wall Street's forecasts for 2024. Yardeni Research leads that with a target of 5,400 points, while JPMorgan is close behind with 4,200 points. In late December, Goldman Sachs raised its own forecast to 5,100 from 4,700, shortly after setting it.

Markets

ES00 stock futures,
-0.28%

YM00,
-0.16%
NQ00,
-0.30%
In the red, but trimmed its losses, with Treasury yields rising BX:TMUBMUSD10Y BX:TMUBMUSD02Y. The DXY dollar advances with gold GC00,
-0.44%
Low and raw CL.1,
+0.58%

BRN00,
+1.00%
modestly higher. NGG24 natural gas futures,
-10.11%
Decreased by 8%.

Buzz

goldman sachs gs,
-0.53%
The stock rose after the fourth-quarter profit increase beat expectations, with Morgan Stanley MS,
-0.89%
Rise on a big win in revenue. Three major banks including JPMorgan,
-0.73%
The index finished weaker on Friday after the start of earnings season. The rest of the week will see reports from more financial companies, along with Caterpillar CAT,
-0.56%.

The Empire State manufacturing index fell to its lowest levels since the pandemic, with a reading of negative 43.7 versus a forecast of negative 4. Fed Governor Christopher Waller is scheduled to speak at 11 a.m. — a speech he delivered last November that signaled the central bank's dovish shift. .

tesla TSLA,
-3.67%
CEO Elon Musk has said he wants more control over the company, which one analyst says creates a “distraction for it.” Shares fell 2% in pre-market.

apple apple,
+0.18%
It is offering discounts in China on some of its iPhones. Stocks slide.

QSR restaurant brands,
+0.33%
Its Burger King subsidiary buys franchisee Carrols Restaurant Group TAST,
+0.72%
In a deal worth one billion dollars.

Berkshire Hathaway BRK.A,
+0.02%

Brk.b,
+0.08%
Warren Buffett has steadily boosted his stakes in five Japanese financial companies, says the CEO of one of them.

A deadly and dangerous Arctic cold front continues to sweep across the United States, closing schools and flights and stressing communities.

Donald Trump won the Republican presidential caucuses in Iowa, while Florida Governor Ron DeSantis came in second.

The World Economic Forum in Davos kicks off in earnest on Tuesday, with climate change and artificial intelligence high on the list of global priorities.

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Chart

Julien Emanuel, of Evercore ISI, has this warning: “Preparing for politically driven stock market volatility over the coming weeks both in the US and abroad is undervalued by investors.”

Focusing on the United States, where the Republican presidential primary in New Hampshire is just around the corner, this chart provides:

“The history of US election years in which congressional control has been as politically ‘tight’ (House 10 seats or fewer, Senate 2 seats or fewer) as in 2024 is unambiguously volatile for stocks – 5 of 8 years down, 2/3 years up “With the recession,” Emanuel says.

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