There’s a shift in tone happening across Wall Street.

Oppenheimer Asset Management’s Chief Investment Strategist John Stoltzfus lifted his target on the S&P 500 index to a Street high, a day after Morgan Stanley’s Michael Wilson, one of the market’s leading doomsayers, sounded less bearish than usual. 

Stoltzfus now sees the S&P 500 index hitting 4,900 by the end of the year, leaving room for another 7% gain. The target would mark a new record for the gauge, and one that plays out against bearish predictions by bigwigs such as Wilson, JPMorgan Chase & Co.’s Marko Kolanovic and Bank of America Corp.’s Michael Hartnett. They were all blindsided by the resilience of the US economy and the sudden emergence of the artificial intelligence-driven tech rally.

US equities have soared this year as investors looked past the earnings recession, growing confident that the economy would avoid any serious slowdown while anticipating less hawkish monetary policy. Even so, the most recent median forecast among Wall Street strategists tracked by Bloomberg still showed a decline for the index by year-end.

Eoin Treacy's view

The time to be most cautious is when all of the bears throw in the towel and become bullish. That suggests the available cash on the sidelines, waiting for a pullback has given up, and conceded now is the time to take big bets.

The surprise prediction for 2023 I was discussing in the video in January was the potential for a big recovery in the first half of the year because the consensus was for that to occur in the 2nd half of the year.

The out of consensus view now is the second part of the year will disappoint.