Major financial groups like Oppenheimer, Deutsche Bank, and Bank of America, have transitioned to a bullish case for the S&P 500 (^GSPC) for 2024, predicting it will reach 5000 points or more in the new year.

Looking back, some of these groups, like Bank of America, predicted stocks would remain flat so, why the change of heart? Yahoo Finance Reporter Josh Schafer joins the Live show to put these predictions in context and take a look at market conditions heading into 2024.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Video Transcript

MADISON MILLS: Speaking of spending, the bulls on Wall Street are back here. The stock market defying expectations this year. More strategists are putting many bear cases to rest now.

So who are these big bad bulls and what are they seeing in this year ahead? Yahoo Finance's own Josh Schafer here with the details. Josh, what do you got?

JOSH SCHAFER: Yeah, Maddie. Let's talk about the bulls, right?

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MADISON MILLS: Let's talk bulls.

JOSH SCHAFER: Talking about the bears can be a little sad, right? Let's talk about the big bad bulls because they're a little bit more excited this year. We know it's been 2024 outlook season on Wall Street and we've been talking a lot about just S&P 500 projections.

You can see on your screen there some pretty big calls. Fundstrat and Oppenheimer coming in at 5,200. From when they made those calls, that's about a 13% increase from where the S&P 500 was.

But notably, too, what I want to highlight at the end of your screen there, Bank of America 5,000. Last year, Bank of America saw stocks roughly flat. This year, they're projecting about a 10% increase, which, sort of, got me thinking, as we've been talking to a lot of these strategists, why more bullish this year?

We're still talking about a recession. We're still talking about Fed uncertainty. And some of those tightening financial conditions could still come and grab corporates. We have the same issues that we had going into '23.

But Savita Subramanian from Bank of America, sort of, laid out an interesting case. She said, you know, we've had a year of surviving higher interest rates. She mentioned a company like Meta. Take a look at Meta stock over the last year, it's done very well. They used that year of efficiency and they actually created a better cost structure.

Their costs were down 7% last quarter compared to the year prior. Margin went from 20% to 40% compared to the same quarter a year prior. So a company like Meta is a great example of companies, sort of, figuring out how to deal with this higher interest rate environment. And then the other thing that I talked to everyone about that was pretty funny was the recession. Because a lot of these strategists on Wall Street that are pretty confident at this point just don't see the recession.