Synopsis
US stock market, Wall Street predictions for S&P 500 are getting released.
APAn annual ritual is underway at the major Wall Street investment houses: predicting exactly where the S&P 500 will finish the next calendar year. This mission is impossible, but that hasn’t stopped teams of well-trained strategists at august brokerages and investment banks like Goldman Sachs, Bank of America and Morgan Stanley from focusing their analytical firepower on forecasting the future, NYT News Service reported.
How wrong can these guesses be? Paul Hickey, a founder of Bespoke Investment Group, compared the yearly Wall Street predictions and actual market results starting with the forecast for December 31, 2000, as per the report on NYT News Service.
He found that the Wall Street consensus only ever predicted gains, every single year, of about 8.8 per cent on average. Of course, there were big losses some years, as well as larger-than-expected rallies in others, so the variance between actual annual performance and the prediction was huge — an average gap of 14.2 percentage points.
In the 12 months of 2022, for example, the S&P 500 fell 19.4 per cent; in the recession year of 2008, it plummeted 38.5 per cent.
After the terrible year of 2022, strategists became more cautious. For 2023, experts forecast a gain of 6.2 per cent, but the market rose 24.2 per cent. For the current calendar year, the consensus prediction was that the S&P 500 would rise only 3 per cent, yet by Friday, the stock market was already up about 24 per cent.
That brings us to 2025. After failing to anticipate the soaring stock market, strategists are more optimistic than usual now, predicting a price gain of 9.6 per cent for the next calendar year. That number doesn’t include dividends, which would lift the total return of the S&P 500 above 11 per cent.
FAQs
Q1. Who are making S&P 500 predictions for 2025?
A1. Brokerages and investment banks are making S&P 500 predictions for 2025.
Q2. What is the status of S&P 500?
A2. S&P 500 fell 19.4 per cent.
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