Deutsche Bank expects the S & P 500 could climb more than 11% to a record next year — and said its base case seems “conservative.” The investment bank set its 2024 year-end S & P 500 target at 5,100, or more than 11% above where the broader index closed Friday at 4,559.34. It incorporates expectations of a mild, short recession that’s been pulled forward. In its bull case, Deutsche Bank expects the S & P 500 could even climb to 5,500, or more than 20% above where the benchmark closed last. But the bank said either scenario is a moderate assumption when compared with where the index is trending. “We note that the S & P 500 has been in a clear trend up channel since the [Great Financial Crisis]. After falling below last year, the rally in the first half this year took it back up to the bottom and it has been muddling along at the lower end since. A continued muddle through along the bottom implies 5300 by end 2024, while a move to the middle to 6000,” Jim Reid, London-based head of global economics and thematic research, wrote in a Monday note. “By comparison, our base case target of 5100 and even the upside scenario of 5500 look conservative,” Reid added. The forecast is higher than some recent 2024 targets. Bank of America’s Savita Subramanian recently called for a year-end target of 5,000, as did RBC’s Lori Calvasina . Goldman Sachs’ David Kostin expects the S & P 500 will chop around and finally end next year at 4,700 . But Deutsche Bank expects that markets have already priced in concerns around higher interest rates and geopolitical risks, and argued that any selloff from a possible recession would be short-lived and mild. What’s more, equities typically rally in the aftermath of a U.S. presidential election, set for next November, Reid wrote. And, he expects “large potential upside risk” from tight labor markets may bolster productivity by encouraging the adoption of new technologies such as generative artificial intelligence. The German bank remains neutral on mega-cap growth and technology stocks, citing elevated valuations after their rally this year. It recommends overweight positions in financials and consumer cyclicals that could bounce back after their recent weakness, and remains neutral on energy while turning overweight on materials. It remains underweight in defensive stocks until it sees falling bond yields coupled with recession fears.