Brokerage HSBC expects the S&P 500 index to reach 6,700 by the end of next year.
The mentioned forecast was formed based on circumstances such as robust growth of corporate earnings and the resilient condition of the United States economic system.
The current brokerage vision foresees an increase in the S&P 500 index by about 10.3% compared to the last close at 6,075.11.
HSBC analysts led by Nicole Inui wrote in a note that they expect equity returns next year to be focused on earnings growth as valuations are more stretched. According to their forecast, earnings will increase by 9%, given the slower but still resilient economy of the United States and some margin expansion.
The benchmark index has demonstrated a good dynamic this year. The corresponding figure increased by almost 28%. To a large extent, the appropriate result was facilitated by the dynamic of the shares of the so-called Magnificent 7. It is worth noting that in this case, the driving force of growth is the so-called boom of artificial intelligence.
Also, the factors supporting the mentioned index were the resilient macroeconomic background, the continued increase in earnings, and a gradual decrease in inflation.
HSBC claims that the sequence and timing of changes in the monetary policy of the Federal Reserve System, the pace of price growth, and elevated valuations will be the main topics for the equity market next year.
The brokerage predicts that the central bank of the United States will lower the cost of borrowing by another 125 basis points by the end of next year.
As we have reported earlier, HSBC Launches New Platform.
