In its outlook for the upcoming year, Société Générale, the French bank, predicts a rollercoaster ride for the S&P 500. The benchmark index is expected to reach near-record highs, experience significant drops, and then stage impressive comebacks. The bank's forecast, published on Monday, provides insight into the potential movements of the index throughout the year.

Société Générale expects the S&P 500 to climb to 4,750 points in the first three months of 2024, only a whisker away from the all-time high of 4,796 points, which it achieved in January 2022. This bullish projection suggests a positive start to the year for the large-cap US stock prices.

However, the bank also anticipates a slide of 12% to 4,200 points in mid-2024 as a mild recession takes its toll on the US economy. This temporary setback is expected to be followed by a recovery in the fourth quarter, with the index rallying back to the earlier predicted 4,750 points. The anticipated rally is said to be influenced by the Federal Reserve's decision to initiate interest rate cuts.

Manish Kabra, the head of US equity strategy at Société Générale, explains, "By the end of the year, we expect to see rate cuts by the Fed of 150 basis points, a downturn in GDP growth and clarity on the political election cycle. The S&P 500 should be in 'buy-the-dip' territory, as leading indicators for profits continue to improve." However, Kabra warns that the journey throughout the year will not be smooth, as they are also expecting a mild recession in the middle of the year, a credit market sell-off in the second quarter, and ongoing quantitative tightening.

As of Wednesday's closing bell, the S&P 500 traded at 4,556 points, reflecting a year-to-date climb of 19%. This ascent has been driven by the exceptional performance of major tech stocks, dubbed the "Magnificent Seven," and investors' optimism regarding potential interest rate cuts by the Federal Reserve.

Notably, other prominent Wall Street strategists have also projected optimistic outcomes for the S&P 500 in 2024. Goldman Sachs' David Kostin recently stated that he expects the index to reach 4,700 points by the end of the year. Bank of America and RBC Capital Markets have set year-end targets of 5,000 points, comfortably surpassing previous record highs.

With the forecasted ups and downs, investors should brace themselves for a volatile and eventful 2024 for the S&P 500 as it nears record highs, experiences drops, and stages comebacks along the way.