I’ve avoided being this blunt until now, but here it is: It doesn’t make a lot of sense to devote overflowing coverage to Wall Street’s top-down equity strategists.

That doesn’t mean I won’t do it in 2024, particularly in the event there’s a significant selloff, but we shouldn’t harbor any illusions: Forecasting the S&P 500 a year (let alone two or three years) in advance is a mug’s game. Everybody knows that. Including the people whose job it is to do it.

I’ve also grown weary of repetition and recitation. Some readers likely have too. In defense of the profession, 2023 was a uniquely challenging year, but all the same, there simply isn’t a lot to be gained or gleaned from relentlessly parsing and documenting every incoming missive from the equity research side on Wall Street.

You know the forecasts for 2024. If you don’t, I’ll highlight the figure below one more time for anyone who might’ve missed it over the holidays. It shows year-end 2024 SPX targets by bank and analyst.

The range is 1,000 S&P points. That says a lot on its own.

In his first full-length missive of 2024, Morgan Stanley’s Mike Wilson said this year could be another roller coaster — “another year of twists and turns with the consensus view on key macro variables/outcomes shifting back and forth,” as he put it.

Folks, with apologies, that’s every year. Or every year I can remember anyway and, as noted over the weekend, I’m older than I am young. (Decode that.)

In any case, Wilson (who I’ll continue to cover because everybody loves Mike, including me), said stocks and bonds may trade in a range “until the [macro] outcome is more definitive.” The annotations on the figure below illustrate the extent to which “starting and ending points” (as Wilson put it) belied the interim to and fro in 2023.

The question now, Wilson said, is whether the year-end rally “was simply a short squeeze (on stocks and bonds) or a sign that the macro fundamentals are finally about to improve in a sustainable manner.” The latter outcome would constitute a “a mid-cycle re-acceleration.”

Wilson considered three different macro scenarios for 2024. The consensus is soft landing. The (very) short version of his conclusion read as follows:

For 2024, we believe it will be important to consider several macro scenarios to decide how to position. Despite the significant rally into year-end, recent macro data still suggests a muted growth environment, which epitomizes a “soft landing” outcome. The market understands this dynamic. Interest rates and financial conditions explain almost all of the increase in stock prices with equity valuations expanding by almost 15% over the past two months. This means growth will likely need to re-accelerate (while rates remain relatively tame) for equity prices to move materially higher from here. Ultimately, we think investors should try to express their macro views via single stocks, factors and sectors rather than cap-weighted indices.

That, in a nutshell, is Wilson’s near-term outlook. In one sentence: Stocks have re-rated on the back of easier financial conditions and expectations for Fed cuts, a dynamic which has probably run its course in the short-term, putting the onus for any rally extension on growth.

Wilson also expressed something like concern at the unanimity around the US macro outlook, which makes for a rather stark juxtaposition with (and increases the odds of) the “twists and turns” he expects this year.

“While most are no longer looking for a recession in the next 12 months, they aren’t forecasting an exciting growth path either [which] is largely in line with what the Fed is expecting,” Wilson said, adding that it’s rare to see “such close alignment on a potential macro outcome.”

He went on to gently note that “a lack of dispersion in forecasts can sometimes end up leading to higher variance in price both on the upside and the downside.”