2023 is witnessing a strong rebound, which has caught Wall Street bears off guard as their short positions in the US stock market are dwindling.

Zhitong App has learned that Wall Street strategists abandoned their usual bullish views on US stocks when entering 2023, only to be caught off guard by a strong rebound. Now, they are once again predicting annual growth for US stocks in the coming year.

Strategists from Bank of America, BMO Capital Markets, and Deutsche Bank all expect the S&P 500 index to rise again next year and surpass the historical high of 4769.56 points set in early 2022. Goldman Sachs and Societe Generale have less optimistic forecasts, but still expect the S&P 500 index to see a slight increase by the end of 2024, albeit below the historical high set in early 2022.

The current outlook on Wall Street is in stark contrast to the predictions made a year ago. At the end of last year, most people warned that rate hikes would trigger an economic recession and severely impact the stock market. However, with sustained economic growth and the AI boom driving a significant increase in tech stocks, the S&P 500 index has risen by over 18% so far in 2023.

This has made bearish forecasters more optimistic about the prospects for US stocks next year, although they remain cautious. According to compiled data from the media, their average target for the S&P 500 index is a 3.5% increase.

Deutsche Bank strategist Binky Chadha and BMO Capital Markets strategist Brian Belski were among the few who correctly predicted the rise of the S&P 500 index earlier this year. Now, their target for the S&P 500 index at the end of 2024 is 5100 points, representing a 12% increase from Monday's closing. Binky Chadha stated that favorable inflation trends and a surge in corporate profits will be key driving factors. Brian Belski mentioned expectations for resilience in the job market, easing consumer price pressures, and a potential interest rate cut by the Federal Reserve in the second half of next year.

Bank of America strategist Savita Subramanian was one of the first to switch to a bullish view earlier this year. He predicts that the S&P 500 index will rise to 5000 points by the end of 2024. He said, "Not because we expect the Federal Reserve to cut interest rates, but because of the achievements the Federal Reserve has made in raising rates, reducing inflation, and improving corporate efficiency."

Goldman Sachs strategist David Kostin predicts that the S&P 500 index will rise to 4700 points by the end of next year, representing a 3% increase from Monday's closing, slightly below the historical high set in early 2022.

The performance of the US stock market this year has disappointed those who predicted a bear market in 2022. As one of Wall Street's most steadfast bears, Morgan Stanley strategist Mike Wilson's pessimistic predictions for this year have yet to materialize. His outlook for next year has also become more positive. While he believes that the momentum behind the recent rally is waning, he expects the S&P 500 index to reach 4,500 points by the end of 2024, roughly in line with current levels.

Some of the major concerns raised by those skeptical of the recent rebound in the US stock market are the possibility of an economic downturn, the dominance of a few big winners in the stock market, and a significant decline in corporate profits. These risks have not disappeared, and the stock market could be dragged down by the continued impact of high interest rates on the economy. However, at least for now, with the US economy showing remarkable resilience, the stock market continues to rise.

Adam Parker, CEO of Trivariate Research and former Chief US Equity Strategist at Morgan Stanley, said, "If you're a strategist at a large company and you're intellectually honest and you work long enough, you'll spend part of your career in all four quadrants: bullish, bearish, right, and wrong." "I think it's fashionable to mock strategists when they make mistakes, but ultimately, if you have a process that you can respect and understand what drove them to make that decision, then they still have value."