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In a recent forecast, BMO strategists projected a notable rally in the stock market, with an approximate 12% rise for the stock market, setting a target for the end of 2024 at 5,100. His optimistic outlook also includes a bullish scenario in which the index could potentially rise as high as 5,500, provided the economy avoids a contraction.
The basis for Belski's positive projection depends on several key factors. Declining inflation and interest rates, along with strong employment figures, are expected to drive market growth. Unlike previous years, where the performance of mega-cap tech stocks dominated, Belski anticipates a broader rally across multiple sectors.
Amid widespread fears within the investment community of a severe recession, often referred to as "Chicken Little," BMO forecasts that any recession would have minimal impact on the market's bullish trend. Analysts suggest investors consider strategic positions, recommending an overweight in the financial and information technology sectors. Instead, it advises against investments in energy, materials and consumer staples, predicting underperformance in these areas under projected market conditions.
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