Wells Fargo announces 2024 target, cautions about 'extremely careless' first half for stocks.

Wells Fargo Securities is officially out with its 2024 stock market forecast.

The head of equity strategy at the firm, Chris Harvey, envisions a turbulent journey towards achieving his year-end target of 4,625 for the S&P 500.

Getting excited is difficult. Better economic growth means the Fed won't act, while worse growth will lead to numbers coming down and the Fed eventually cutting. The second half will improve, but the first half will be very poor.

Harvey’s target is just 75 points above Monday’s close.

Can we increase our altitude further? Yes, we can climb a bit more. However, I believe we cannot reach an extremely high altitude," he stated. "Some have discussed a goal of 5,000 feet. I am unsure how we can achieve that height.

Harvey advised clients in his 2024 outlook note to prepare for a "trader's market" rather than a "buy-and-hold situation." His initial strategy for the year: Begin with a cautious approach.

Harvey stated that every time the VIX has been at 13 going into a new year, there have been spikes in the equity market, and this is not a favorable setup for 2024.

The higher cost of capital is an additional market problem, as it prevents multiples from going higher, according to him.

Harvey stated that it is difficult for him to reach a higher price target as long as the cost of capital remains high.

Yet, he still sees opportunities for investors.

Harvey stated, "We want to visit places that are oversold. We upgraded today. We upgraded." He added, "Those areas have good valuations, decent fundamentals, and most people aren't there yet."

‘I hate to say that as being head of equity strategy’

Harvey also sees Treasurys as an option.

Harvey stated that although he is the head of equity strategy, there are attractive alternatives to consider, and one can park money at the front of the curve to achieve a good rate of return with minimal risk.

His 2023 S&P target is 4,420, which means a three percent decline from Monday's closing price.