Tom Lee’s Accurate Stock Market Forecast for 2023 and Predictions for 2024

## Tom Lee’s Accurate Stock Market Forecast for 2023 and Predictions for 2024

Tom Lee, a strategist at Fundstrat, had the most accurate stock market forecast in 2023, predicting that the S&P 500 would end the year at 4,750, which was within 1% of its current level. Lee’s forecast was in stark contrast to the bearish sentiment that prevailed among investors at the time, as they were still reeling from the brutal bear market that had lasted nearly all of 2022.

Lee’s prediction was based on his belief that the US economy was remarkably resilient in the face of a rapid Federal Reserve hike cycle. He argued that the plurality of equity investors expected an inevitable recession as the Federal Reserve continued to raise interest rates, but if his assessment of falling inflation and the end of rate hikes was correct, a “soft landing” would be the most likely outcome.

As it turned out, Lee’s forecast came to fruition, with the S&P 500 soaring 25% in 2023 to its current level of around 4,785, which is within 1% of Lee’s initial 2023 price target. In fact, his forecast was the closest to predicting the S&P 500 among the strategists tracked by Bloomberg.

Looking ahead to 2024, Lee is once again expecting a solid year for the stock market, with a S&P 500 price target of 5,200 by the end of the year, representing a potential upside of 9% from current levels. According to Lee’s 2024 outlook, the key driver for further stock market gains will be the easing of financial conditions throughout the year.

Lee’s optimism is based on the fact that the Federal Reserve has signaled that its next interest rate decision is more likely to be a cut than a hike, and the market is currently pricing in at least five 25-basis-point cuts for 2024. This expectation of lower interest rates is expected to boost corporate earnings and encourage investors to take on more risk, leading to higher stock prices.

In addition to the easing of financial conditions, Lee also expects the global economy to continue to recover in 2024, which will provide a further boost to corporate earnings and stock prices. He believes that the US economy will continue to grow at a steady pace, with low inflation and stable interest rates, providing a favorable environment for investors.

Overall, Lee’s forecast for 2024 is based on a combination of factors, including the easing of financial conditions, the global economic recovery, and the continued growth of the US economy. While there are always risks and uncertainties in the stock market, Lee’s track record of accurate forecasts suggests that his predictions for 2024 are worth considering for investors looking to make informed decisions about their portfolios.