BMO strategists are maintaining a 5,100 year-end point target for the S&P 500 (^GSPC) in 2024, alongside a $250 EPS projection. BMO Capital Markets Chief Investment Strategist Brian Belski — the man behind BMO's call — sits down in-studio with Yahoo Finance Live to discuss the market themes anticipated for the new year.

"People have been so macro and quantitatively drive the last, let's say, three or four years, and they've been wrong aside from 2022," Belski says on BMO's recent report. "We believe that the 'yeah, but' bears are going to continue to change their narrative..."

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

This post was written by Luke Carberry Mogan.

Video Transcript

SEANA SMITH: Let's talk a little bit more about what we could expect here in 2024 because strategists are turning more bullish on next year.

BMO Capital Markets calling for the S&P 500 to hit a record next year, climbing to 5,100 by year end.

And the team also seeing a significant rebound in earnings next year, with an EPS target of 250.

So what are the best ways to play some of these anticipated gains?

We're joined by the strategists behind that call.

Brian Belski, BMO Capital Markets chief investment strategist joining us here first time in our new studio.

BRIAN BELSKI: Oh, my gosh.

SEANA SMITH: At the desk.

BRIAN BELSKI: So nice.

SEANA SMITH: He did like and a great week to have you.

You're off with this bullish call right now on the S&P 500 relative to what some of the other strategists out there in the Street are anticipating.

What's going to drive that momentum?

BRIAN BELSKI: Well, we can't speak to other people's work.

I mean, this is a really hard job.

It's a tough gig.

And we received a lot of pushback last year when I was the only published strategist that said stocks would be up.

And then we raised our target from 4,300 to 4,550 in May.

Again, people thought we were crazy.

Now we came out at 5,100 and 250 terms of earnings.

And it's not a jump up and down bullish, super bullish call, but I think it's more of a common sense call.

Part of our theme is two parts.

Number one, 2024 is going to be a year two of normalization.

It is also a year two of the cyclical bull market, part of our 2025 year cyclical bull market call that's been in place since 2009.

So let me kind of take that back.

Last year, we said '23 was going to be a year one of normalization.

What does that look like?

High single digit to low double digit performance and earnings growth.

Multiples from 15 to 18 in a trading range in with respect to interest rates, meaning the 10-year treasury.

Quite frankly, I don't care about the Fed funds futures because they've been wrong, wrong, wrong.

And we kind of took a swing at some of the macro investors in our report saying people have been so macro and quantitatively driven the last, let's say, three, four years.

And they've been wrong.

Aside from 2022-- so congratulations, bears are right 3 out of 10 years, and that was one of them.

And so we believe that the yabba bears are going to continue to change their narrative.

Oh, this year is going to be the recession, or now what's the new theme?

Well, now the new theme is going to be deflation.

So they're continuing to spin their web to be bearish the entire time.

By the way, you don't buy an economic indicator.

And they're trying to make these big market calls.

Guess what?

The market is a market of stocks.

You buy companies.

You don't buy GDP.

You don't buy ISM.

You don't buy this.

You buy companies.

SEANA SMITH: Well, then does it even matter if we have a recession?

BRIAN BELSKI: Well, it's a great question, and there's a very good chance we don't get a technical recession.

However, our call is rhino recession in name only, meaning growth contracts, but it doesn't become negative.

The investors and the consumers are feeling like it's a recession.

We've already pivoted, by the way.

The consumers have already pivoted.

And then we come out of that, meaning the second half of the year, we probably see inflation drop even a little bit more, and maybe growth slows enough for the Fed to say, OK, inflation's cooled.

Growth is slowed, not become negative.

And then the Fed says, we're going to start cutting rates.