Big mistake! The most pessimistic bears on Wall Street are turning around: willing to let go of their arrogance and take a more optimistic view of the future market.

Zhitong App has learned that the Federal Reserve's moderate policy shift has even forced the most bearish investors on Wall Street to change their views on the US stock market. Among them, Mike Wilson, one of the biggest pessimists among sell-side strategists at Morgan Stanley, said on Monday that the Fed's shift last week was "good news for the stock market."In addition, Michael Kantrowitz of Piper Sandler, who had the most pessimistic outlook for the S&P 500 index this year, has now expressed his reflection and believes that the stock market may continue to rise, and the magnitude of the rise may expand.It is understood that the reflection of these usually pessimistic forecasters marks a turning point. Even when the market soared and achieved double-digit returns, leading the major indices to reach or approach historical highs, they still advised clients to remain cautious about the US stock market this year.Entering 2023, forecasters had warned that higher interest rates would cause the economy to enter a recession and erode corporate profits, triggering a sell-off in the stock market. On the contrary, the labor market, consumers, and US companies have shown resilience, driving the S&P 500 index to rise by about 24%.In response, some strategists still adhere to their views, stating that the lagging impact of higher borrowing costs will eventually present a real test for investors. It became more difficult to stick to these warnings after Federal Reserve officials hinted last week that their rate hike campaign may be coming to an end and projected rate cuts next year.In a report to clients on Friday, Kantrowitz said, "I was dead wrong about my absolute return forecast for stocks this year," admitting that the Fed's shift has clearly been positive historically. "I'm trying to keep an open mind, follow history and my framework, and be willing to let go of my arrogance and stubbornness."It is worth mentioning that after widespread misjudgments this year, Wall Street strategists have become more optimistic about the stock market in 2024. Companies including Bank of America, Deutsche Bank, and BMO Capital Markets predict that the S&P 500 index will reach or exceed 5,000 points. However, the consensus view remains conservative, with an average forecast slightly above 4,800 points for next year, representing an expected increase of only about 1% from current levels.Currently, some companies are reassessing their outlook. Goldman Sachs raised its year-end target for the S&P 500 index a month after setting it, with strategist David Kostin expecting the index to rise to 5,100 points by the end of next year, nearly 9% higher than his mid-November forecast of 4,700 points.However, Morgan Stanley's Wilson called the Fed's shift "good news" for the stock market, but he did not completely change his stance. He maintains his target for the S&P 500 index next year at 4,500 points, which means a 5% drop from Monday's closing price.Wilson said, "This is positive for the stock market because it means that if the Fed focuses more on maintaining growth rather than being overly concerned about bringing inflation down to its 2% target, the likelihood of a soft landing increases. But this does not mean that this moderate shift will not increase the risk of future inflation reacceleration."