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cailianshe news, september 21 (editor: huang junzhi)after the federal reserve cut interest rates by 50 basis points on wednesday, brian belski, investment director of bank of montreal (bmo), called out the highest target price on wall street: 6,100 points!

in the latest report,belski raised his 2024 price target for the s&p 500 to 6,100 from 5,600, implying a potential gain of 7% over the next three months.

among a list of positive factors, he specifically mentioned the federal reserve's interest rate cut.“much like when we last raised our price target in may, we continue to be surprised by the strength of the market’s advance and have again decided a larger correction is warranted,” he wrote.

belski said favorable seasonal data suggests that u.s. stocks will end the year strong in the fourth quarter."especially after the fed shifted into easing mode."

coincidentally, tom lee, co-founder and head of research at fundstrat global advisors, a u.s. investment institution, who is nicknamed "wall street's god of calculation" by the industry, also believes that the fed's interest rate cut will be good for u.s. stocks. however, he also pointed out that investors should continue to be cautious before the official election in november.

“i think the fed’s rate-cutting cycle sets the stage for a really strong market over the next month or three months,” he said. “but between now and election day, i think there’s still a lot of uncertainty about where the stock market is going to go. that’s why i’m a little hesitant to invest.”

on the other hand, bmo data shows that since 1950, there have been only eight years in which the s&p 500 rose by about 15%-20% in the first three quarters of the year. according to belski,during those years, the s&p 500's average fourth-quarter return was about 6%, about 50% higher than the average return over the calendar year.

he also found thatencouragingly, the recent stock market rally isn’t concentrated just in big tech stocks.instead, the u.s. stock market rebound has broadened to other sectors and smaller companies.

“we expect this trend to continue and should help support future market gains even if large-cap price and fundamental performance continues to slow in the coming months,” he explained.

finally, belski said,as the likelihood of a soft landing for the u.s. economy increases, higher valuations are justified.based on his price target of 6,100, that implies a price-to-earnings ratio of 24.4, which is above the historical average.

“we continue to believe that a soft landing is the most likely economic scenario, which makes the current economic environment most similar to the mid-1990s, a period during which the index was able to maintain a price-to-earnings ratio of more than 20 times for several years.”