Are we REALLY entering a 'stock pickers paradise'? Bank of America issues optimistic research note claiming stock market will reach record highs next year - but not all experts agree

Bank of America strategists have predicted stocks will hit record levels next year. 

Savita Subramanian, the bank’s head of US equity and quantitative strategy, wrote in a note Tuesday that she sees the S&P 500 index ending 2024 at 5,000. 

That would be an all-time high for the market index, which tracks the stock performance of 500 of the largest companies in the US, including Amazon, Apple, Tesla and Walmart. 

It would also be 10 percent higher than Monday's close at 4,547. 

The bank is joining a chorus of optimistic Wall Street forecasters, with the note saying that 'the market has absorbed significant geopolitical shocks already.' But others are much less optimistic, with one market 'prophet' last week predicting stocks could fall by as much as 30 percent.

The market has been riding high recently - buoyed by gains in the 'Magnificent Seven' technology stocks Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla.

The S&P 500 has rallied 18 percent this year as confidence has increased that the Federal Reserve would soon end its aggressive interest rate hiking campaign. 

The increases have taken rates from a low of 0.5 percent in April 2020 to a 22-year high of between 5.25 and 5.5 percent today. 

The Fed held benchmark borrowing costs steady at its latest meeting earlier this month - marking the third time in seven policy meetings this year that the central bank has not raised rates. 

Subramanian said her team is 'bullish' on US equities for next year 'not because we expect the Fed to cut, but because of what the Fed has accomplished.'

The US Securities and Exchange Commission define a 'bull' market as a time when when stock prices are rising and market sentiment is optimistic.

Stocks soared immediately following the news last week that the annual rate of inflation had fallen slightly to 3.2 percent. 

Subramanian forecast that by the end of this year, the S&P 500 will hit 4,600 - around 1 percent from its current level.  

She said she anticipates a 'stock picker's paradise' next year, as certain companies separate themselves from the pack. 

'Companies have adapted (as they are wont to do) to higher rates and inflation,' she wrote. 

Cyclical stocks - which are known for following the cycles of an economy through expansion, peak, recession, and recovery - are the best bet for next year, according to the strategist. 

She also added that she is bullish about the market going into 2024 as election years 'tend to be positive for equities.'

It comes amidst a mixed outlook on the US economy. Wall Street 'prophet' Gary Schilling who predicted the 2008 housing crash said last week that stocks would likely fall to their lowest level since the pandemic, adding that a recession is imminent.

And last week investors were spooked by the emergence of the dreaded 'death cross' technical pattern on the Dow Jones Industrial Average index.

A death cross is when the 50-day moving average of an index drops below the 200-day average - indicating momentum is weakening. A moving average is the average range of prices of an asset over a given period of time. 

The pattern effectively tells investors that prices have deteriorated in a short period of time. The sign has appeared before several major crashes including in 2008 and 1929. The last time it appeared was March 2022, when the markets plunged 12 percent over six months. 

But Todd Walsh, chief technical analyst of Alpha Cubed Investments, told DailyMail.com the death cross appears to be 'touch-and-go', and one small part of a bigger picture.