Experience shows that investors should expect US stock prices to rise in the second half of 2023. Reuters
After a surprisingly strong rally in the first half of 2023, investment bank BMO Capital Markets remains bullish.
Analysts’ year-end price target for the S&P 500 includes a modest uptrend with new highs possible.
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After a surprisingly strong start to 2023, investors can expect further gains in US equities over the next six months, according to strategists at BMO Capital Markets.
The S&P 500 appears poised to build on its 15.9 percent rally in the first half of the year. However, BMO’s year-end price target of 4550 points suggests the index has just 2% upside potential from current levels. The company believes the S&P 500 could rise another 13.5 percent to end the year at 5,050 points.
BMO Capital Markets
After two and a half aimless months that saw a series of regional banking crises, US stocks gained momentum in mid-March that continued into the second quarter. A strong recovery ensued as the economy showed remarkable resilience. Although concerns about persistent inflation and slower earnings growth remain, Brian Belski, BMO’s chief investment strategist, is optimistic.
“In our view, any concerns that have hurt market development in 2022 are slowly beginning to subside,” Belski wrote in a statement at the end of June. He added: “We believe that the anticipated recipe for disaster simply does not apply.”
Historical precedents provide another reason to be bullish on the stock market. Analysts at BMO have found that after a positive first half, the S&P 500 is up an average of 6% 78% of the time in the second half, with data going back to the 1950s.