Oracles of Wall Street 2024

In many ways, 2024 seemed like a continuation of 2023 regarding markets.

The US economy remained on its path to a soft landing. Artificial intelligence companies retained their dominance and repeatedly beat earnings. And it increasingly looks like the S&P 500 is due to post another year of 20%+ returns.

But that doesn't mean there weren't new developments in various corners of the market, or that these trends were particularly easy to predict.

That's where Business Insider's 2024 Oracles of Wall Street list comes in, highlighting strategists, analysts, and economists who were on the money with their calls this year.

Selections were made based on internal and external nominations, and those whose calls were both accurate and against consensus at the time were given the most weight. The list, of course, is not exhaustive, but it aims to lift some of the most impressive calls recently for some of the biggest trends in markets this year.

Below, we break down how each selectee made their calls and share their top forecasts for 2025.

S&P 500 melt-up

The S&P 500 has continued on its torrid pace in 2024, posting 27% gains so far in 2024. Investors have cheered on rate cuts, artificial intelligence investment, economic stability, and Trump's election victory, lifting the index beyond most expectations.

As the index sits just below 6,100, some strategists were closer than most with their predictions. Last December, the median 2024 year-end price target among top Wall Street strategists was just 4,500, according to Bloomberg data.

Jeff DeGraaf, chief US equity strategist at Renaissance Macro

In December 2023, DeGraaf said the S&P 500 could hit 5,800 in the year ahead based on a few pieces of evidence he saw.

His proprietary cycle clock indicator, which considers inflation and growth trends, was bullish based on the premise that inflation was expected to stay cool while growth would be moderate enough to induce monetary stimulus.

On top of that, investor sentiment was below where it should have been for how the market was performing in 2023, he thought.

"Sentiment was ridiculously bearish for the kind of year we were having," DeGraaf said. "That's usually bullish. We call it the skeptical advance."

His also-proprietary "thrust" indicator, which considers market momentum gauges, showed a 22% return over the following 12 months as the average outcome given momentum conditions at the time.

"We just said, 'Look, this combination of things taking place certainly look bullish," he said.

Next year, DeGraaf sees the S&P 500 delivering returns closer to 15%, a bit lower than the 28% gains so far in 2024.

"We still like what we see," he said.

Mary Ann Bartels, chief investment strategist at Sanctuary Wealth

Back in March, Bartels also predicted that the S&P 500 would rise to 5,800 by the end of the year.

Bartels has been bullish since the stock market bottomed out in late 2022. Even when the market saw minor pullbacks in 2024, she pointed to strong corporate earnings and the continued leadership of the technology sector as tailwinds propelling stocks higher. With the index now north of 6,000, that optimism has proven correct.

In particular, Bartels strongly believes that AI can transform the economy to the same extent as previous innovations, such as the personal computer.

Similar to the early days of the tech boom in the late 1990s, Bartels believes many strategists don't know how to fully price in the impact of AI.

"I think people are underestimating the improvement in productivity from AI," Bartels told Business Insider. "Productivity will continue to improve just like we saw from 1995 to 2000."

Bartels is confident that the S&P 500 will continue to smash expectations in 2025. She's predicting the index ends next year at 7,200 to 7,400, and she doesn't expect the bull run to fizzle out beyond next year, either — Bartels believes that the S&P 500 could go as high as 10,000 by the end of the decade thanks to pro-business legislation, lower interest rates, and AI.

Tyler Richey, technical strategist and co-editor at Sevens Report Research

Richey was another strategist who saw the S&P 500 climbing well above consensus.

Building on Sevens Report founder Tom Essaye's bullish fundamental outlook, Richey compiled the technical indicators he watches and concluded in February that the index could hit 6,000 by the end of 2024.

For example, the S&P 500's relative strength index, which measures price momentum, had stayed in "overbought" territory for three weeks at the time. When that has happened in the past, it's meant that the trend could continue for several months, Richey said. Investor sentiment was also bullish but not over-extended. And the yield curve was still inverted despite no sign of recession.

"Some of the biggest gains in the bull market — statistically, it's measurable that they occur during yield curve inversions such as the late '90s and 2006-2007," he said.

Going into 2025, however, Richey sees signs that the rally could face hurdles if a negative catalyst comes along.

"Looking ahead, the collection of market indicators and cyclical signals we monitor suggest all the pieces are in place for this bull market to end in the weeks or months ahead and for a cyclical bear market to begin," Richey said in an email. But he added that: "There is nothing in the current fundamental backdrop that suggests a bear market in stocks is a sure thing or even likely for that matter."

Roaring '20s

As we start to approach the midpoint of the 2020s, it's becoming increasingly clear that the US economy is in another "Roaring '20s" era a century after the first. Fiscal and monetary stimulus have fueled an extremely robust economic recovery following the pandemic, and artificial intelligence is expected boost profit margins and productivity.

One strategist first called this a few years ago, and stuck with it even as recession fears swirled:

Jason Draho, CIO Americas at UBS

In late 2021, Draho said in a client note titled "Rose Colored Glasses" that the US economy would enjoy a strong decade ahead. And even as recession fears became consensus in the market in 2022, he stuck with his call, arguing that government spending, artificial intelligence investment, and other factors would boost economic growth and create another "Roaring '20s" era.

Three years later, Draho's prediction is well on its way to coming true. The economy has survived a bout of inflation and subsequent Federal Reserve rate hikes, multiple spending packages have been signed into law, and AI has disrupted the market landscape in full force.

In 2025, Draho thinks GDP growth will remain higher than 2%, and the S&P 500 will climb to 6,600.

"The way things have been trending, it's quite possible that by early 2025 only the most pessimistic investors will need rose-colored glasses to see a clear path to a Roaring '20s outcome," Draho wrote in a September 30 note.

50 basis-point rate cut

The first 50 basis-point cut in 16 years was one of the year's big surprises. Even after the call temporarily became consensus in August, the move at the September FOMC meeting still came unexpectedly to most. But at least a couple of economists stuck to their guns.

Michael Feroli, chief US economist at JPMorgan

Many in the market pushed back on Feroli's prediction that the Fed would start off its easing cycle with a 50 basis point cut in September. Other experts argued that such a cut would send the markets into panic by signaling that the economy was in a bad place.

However, Feroli, who previously served as an economist at the Fed, believed that a more significant reduction in interest rates would be necessary to strengthen the labor market — and that the Fed would prioritize economic policy over the optics of a 50 basis point cut. Feroli thought the Fed should have started cutting in July, so a larger rate cut in September was one way to help the Fed catch up on its quest to bring interest rates into less restrictive territory.

Going forward, Feroli believes 2025 could very well be an uneventful year for both growth and inflation. Trump's reelection means that there's already a playbook for investors of how things went down the first time, he said. However, a change in the White House is still bound to introduce some unknowns to the economy, especially regarding potentially inflationary policy proposals like tariffs and tax cuts, which is why Feroli believes the Fed will cut at a less aggressive pace next year.

Feroli doesn't see any more jumbo-sized cuts in the future, and expects a 25 basis point cut in December.

Neil Dutta, chief US economist at Renaissance Macro

Dutta was another economist that stayed with his 50 basis point cut call for the September Fed meeting.

He first argued that the Fed would cut by 50 basis points in August, when the Sahm Rule unemployment recession indicator triggered. That quickly became the consensus, but that view quickly faded in favor of a 25 basis point cut after August's inflation data showed continued cooling in price growth. Dutta, however, kept with his call.

"The case for 50 is strong, so we are sticking with it," he wrote in a September 15 note. "Powell is more cautious than his counterparts. The most memorable line from his August 23 Jackson Hole speech was, 'We do not seek or welcome further cooling in labor market conditions.' Since then, labor market data has surprised uniformly to the downside."

For 2025, Dutta said his highest-conviction view is that investors are overestimating the amount of fiscal stimulus that Congress will approve.

"I think the most you can really expect is an extension of the tax law," he said. "Because it's a very thin majority in the House, it's going to be very, very challenging to ram things through."

Rate cuts coming later in the year

While investors expected rate cuts in 2024, most thought they would come much sooner than they did. A couple of experts, however, argued late last year that the market wasn't appreciating the degree to which the Fed was going to have to put off slashing their benchmark rate as the economy continually proved resilient.

Zehrid Osmani, portfolio manager at Martin Currie

This time last year, the market was pricing in a near-0% chance that interest rates would still be above 5% in July 2024, with the expectation that the Fed would begin cutting rates as soon as March 2024. At the time, the federal funds rate was 5.25%-5.5%.

But Osmani didn't agree with the overwhelming consensus. Instead, he said in November 2023 that the Fed wouldn't start cutting rates until the second half of 2024.

Osmani based his call on the view that central banks would fail to reach their inflation targets. Specifically, wage inflation would continue to be an issue as consumers sought pay raises to keep up with rising prices, further fuelling stickier-than-expected inflation. When July came around, the fed funds rate had remained unchanged from the start of the year, proving Osmani's outlook correct.

Looking towards 2025, Osmani believes that inflationary pressures will increase thanks to the impact of tariffs on top of already elevated wage inflation levels. As a result, expect the Fed to behave like a "hawkish dove," he said, meaning that while the Fed won't reverse course on rate cuts, it'll slow the pace of easing.

Phillip Colmar, chief US economist at MRB Partners

Colmar was also in this camp, defying overwhelming market consensus that the Fed was poised to slash rates early in the year.

He argued in January this year that the economy didn't need rate cuts, and that the Fed signaling them would essentially lead to a scenario where financial conditions eased on bullish sentiment, making inflation stickier, further hindering their leeway to cut. Realizing this, the Fed would then need to push rate cuts out as it sought to justify them, he said.

Colmar said the Fed would end up cutting by 50-75 basis points in 2024. The central bank has cut by 75 basis points so far, and is expected to drop them again in December, but the market at the time was pricing in more than an 85% chance that rates would be even lower by the end of 2024. Plus, rate cuts have come far later than the market originally expected.

"Our view was that interest rates weren't restrictive. Powell had just said that it was very restrictive, and we need to cut rates to bring it back down to equilibrium not to put us into recession. The market seemed to buy into that, and we said, 'No, no, no, he's got it wrong.'"

In 2025, Colmar said he sees inflation hovering around 3%, above the Fed's 2% target.

Small-cap explosion

After lagging the S&P 500 for the first half of the year, small-cap stocks kicked off a furious rally in July as investors saw rate cuts on the horizon.

Jonathan Golub, chief US equity strategist at UBS

Small-caps' sudden jump in anticipation of lower borrowing rates and an economic acceleration was one of the biggest moves in the market in 2024.

Jonathan Golub saw it coming.

The UBS strategist published a client note titled "Small Caps to Outperform Over Near Term" on June 18, and the sector surged just weeks later, with the Vanguard Small-Cap Index Fund ETF (VB) rising 8.5% from July 9-July 15, and 17% in the second half of the year.

"Over the past year, Small Cap stocks have outperformed when Treasury yields have declined, and underperformed as they've risen. When this relationship has become disconnected, it has quickly reverted," Golub wrote in June. "Since May 30, Large Caps have outperformed by 6.2% despite falling interest rates, a much larger disconnect than the one experienced earlier in the year. This represents the potential for mid- to high-single-digit Small Cap outperformance over the near term."

Heading into 2025, Golub argues in a recent client note that currently high stock valuations are justified. He has overweight ratings on the financials, Industrials, technology, and utilities sectors.

Nvidia rally

Nvidia had an incredible year in 2023, and its share price only flew higher in 2024, rising 180% thanks to impressive earnings beats amid strong demand for its graphics processing unit products.

Matthew Ramsay, analyst at TD Cowen

In December of last year, Nvidia was Ramsay's top chip stock pick for 2024. The stock had already appreciated 220% to a price of around $500, and Ramsay was confident that it had another 40% upside, giving it a price target of $700.

One year later, Nvidia has broken record after record and Ramsay has repeatedly raised his target.

After Nvidia's 10-for-1 stock split in June, Ramsay set the chip giant's price target to $140, up from $120, by year-end. Nvidia's flagship GPU product is used by every leading cloud service provider and AI company — including Google, Meta, Microsoft, Tesla, and OpenAI — to train their large language models.

"The suite of superior technology, long pedigree of innovation, and extensive growth-oriented investments should allow for strong, sustained, above-peer growth across a widening set of verticals," Ramsay wrote in a June 9 client note.

While Nvidia GPUs are most well known for their use in data centers, Ramsay also mentioned a promising up-and-coming business line: autonomous driving, which became a billion-dollar component of Nvidia's business at the end of fiscal year 2024. Other growing end markets for Nvidia chips include gaming, healthcare, and robotics.

Nvidia has smashed analyst estimates every quarter this year, most recently posting $35 billion in revenues last month for fiscal year 2025 Q3. TD Cowen has now upped Nvidia's price target to $175 for the next 12 months, citing sustained customer demand for the company's new Blackwell chips, released in March of this year.

Ramsay recently left TD Cowen, the firm said.

Gold surge

The price of gold also went on a tear this year, beating the S&P 500 so far thanks partly to rate cuts and global central banks buying up the asset.

George Milling-Stanley, chief gold strategist at State Street Global Advisors

In July of this year, Milling-Stanley saw a plethora of signs pointing to a rally in the price of gold. At the time, gold was trading at around $2,370 per ounce. Milling-Stanley set a target price of $2,700 by the end of the year, representing 14% further upside.

Gold has historically performed well in times of economic uncertainty, and there was plenty of uncertainty in the markets this year. Impending rate cuts, US dollar depreciation, sticky inflation, and geopolitical conflicts all signaled an increased appetite for the yellow metal, as investors sought to put a bigger portion of their portfolio in what has historically been deemed a safe-haven asset. Additionally, central banks in emerging markets began upping their allocation to gold, leading to a spike in buying behavior.

The price of gold hit an all-time high ahead of the election on October 30, closing at $2,788 an ounce. It's up 30% overall this year for a price of $2,721 per ounce, in line with Milling-Stanley's prediction.

With the potential of several inflationary policies being implemented under Trump, Milling-Stanley doesn't see demand for gold going anywhere in the year ahead. Tariffs, tax cuts, and increased government spending are all inflationary policies that will heat up the economy and increase prices, he said.

The increasing national debt will be another factor supporting the price of gold as the dollar weakens, Milling-Stanley said. He predicts an 80% probability for the price of gold to stay at current levels or go higher — potentially as high as $3,100 an ounce by the end of next year.