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Stock market professionals are struggling to imagine the S&P 500 plunge in 2021



Farewell, 2020. Hello, 2021.

According to analysts’ ambitious year-end targets for the S&P 500 Index, next year, the Superman style will show an upward trend in the US stock market, and may even rise.

None of the stock market analysts surveyed by MarketWatch for this report foresee a fall in the current level, which many investors already consider this level to be lofty, because investors are entering the most serious pandemic in a century and the key to a new recovery stage. In the office of President-elect Biden, who needs the office to be sworn into the presidential system on January 20.

Although some people worry that the valuation of some companies such as Tesla Inc. TSLA (especially the valuation of large capitalized technology companies) is perfect,
+ 2.44%,
This represents a paradigm of Wall Street’s concerns about market bubbles. Many people believe that stocks will only develop in one direction next year: to the sky.

read: The stock market is very rich, but its valuation may be much more reasonable than traditional measures suggest.

Analysts dismissed the idea that the stock market’s bull market was exhausted, and instead provided estimates of 2021

year-end earnings, and in some cases, the market is expected to rise sharply in the next 12 months.

Dubrovko Lakos-Bujas of JPMorgan Chase can be said to be one of the more compelling predictions of the S&P 500, namely 4,400, which is an amazing increase in the benchmark index , Nearly 19%.

To illustrate this point, the S&P 500 SPX,
+ 0.35%
The Dow Jones Industrial Average (DJIA) has risen nearly 15% in 2020.
+ 0.23%
The year-to-date increase is 6%, and the high-tech Nasdaq Composite Index COMP
+ 0.26%
It is expected to achieve 43% growth in 2020. It hasn’t even begun the astonishing growth from the major stock benchmarks since the low of March 23.

Not only did MarketWatch ask bulls like Dubravko Lakos-Bujas and a few other strategists this year, it is also difficult for the entire stock analyst community to imagine a world where the S&P 500 will fall next year.

S&P 500 analyst goals for the end of 2021

Analyst

contact

2021 target

Dubravco Lacos Bouyas

JPMorgan

4,400

Kristina Hooper

Invesco

4,350

David Costine

Goldman Sachs

4,300

John Stolzves

Oppenheimer

4,300

Brian Belsky

BMO

4,200

Keith Parker

UBS

4,100

Maneesh Deshpande

Barclays Bank

4,000

Julian Emanuel

BTIG

4,000

Sam Stovall

CFRA

4.080

Binky Chadha

Deutsche Bank

3,950

Mike Wilson

Morgan Stanley

3900

Darrel Cronk

Wells Fargo Investment Institute

3900

Tobias Levkovich (Tobias Levkovich)

Citigroup

3,800

Savita Subramanian

Bank of America

3,800

Barry Bannister

Steffier

3,800 (before spring/summer)

According to data from FactSet, the median price target for the S&P 500 index for 2021 is 4,027.21. As of noon on Thursday, the closing price of the broader market index rose by about 9% in a week shorter than the holiday. past.

Source: FactSet

After suffering losses due to the immeasurable tragedy brought about by the COVID-19 pandemic a year ago, the enthusiasm for 2021 is almost indisputable.

According to data from Johns Hopkins University, as of noon on Thursday, a total of 18,495,851 cases and 326,871 deaths have been reported in the United States. Most importantly, during the worst period of the epidemic in the United States, more than 22 million people were unemployed, which paralyzed the economy.

Kristina Hooper maintains one of the more optimistic market prospects for 2021. He said that the progress in launching COVID vaccines and drugs has encouraged the bulls and supported all the past and future buying by the Federal Reserve (Fed). Pledge to keep interest rates near stable until at least 0% by 2023, and continue to buy bonds and monetize US federal debt.

Hooper told MarketWatch via email on Thursday afternoon: “I expect that there will be a lot of growth in the first half of 2021. Once the vaccine is widely distributed, it will curb strong economic growth.” She said: “I also hope the Federal Reserve Maintain an extremely loose attitude. This should support risky assets, especially stocks.”

CFRA’s Sam Stovall has set a target for the S&P 500 Index in 2021, which is close to the median range of FactSet. It has made a more sober assessment of the 4,080 stock outlook.

Stovall said in an interview with “MarketWatch” that “optimism abounds” and he cited his 2021 research outlook report. He said that this goal is achieved by the Fed’s expected loose monetary policy and the hope that the government will provide further financial assistance to keep the fragile economic recovery on track. The virus broke out.

He wrote: “With the dawn of 2021, optimism is everywhere.” He said: “The new government will be established at the beginning of the new year, and it may be supported by a unified Congress, and it may be possible to implement more fiscal stimulus. At the same time, the Fed has promised to take all measures.” Quoting former European Central Bank President Mario Draghi’s famous commitment in 2012, that is, to protect the euro during the worst of the euro zone debt crisis.

BTIG’s Julian Emanuel and Michael Chu said that next year will represent an epic “wealth redistribution”, small capitalized stocks may outperform large-cap stocks, and their value will increase every year. Will explode, causing the undervalued stocks to fall into a long vacation. The pair predicted that this dynamic may boost the entire market.

BTIG explained:

BTIG’s 2021 outlook

Synchronous global growth is supported by the central bank’s relaxation of policies and Washington’s support. Washington used the mixed decisive results of the 2020 elections as a catalyst for cooperation (spending, which is necessary), and a centrist government (without tax increases) leading to wealth redistribution, and During the same period of 2003-06, there was a consistent inflation period when the value exceeded the standard. Growth, small-cap stocks outperformed large-cap stocks, and international stocks outperformed the S&P 500 index.

However, it is worth noting that assuming that the Standard & Poor’s 500 Index maintains current levels through simplified trading during the holiday next week, stock analysts will not even be able to reach their 2020 forecast targets.

MarketWatch’s Chris Matthews reports that Piper Jaffray’s Craig Johnson is closest to the current S&P 500 index of 3,700 points, and the initial year-end goal is 3,600 points.

To be fair, pandemics are difficult to predict, and few (if any) can correctly estimate how the market will respond to the public health crisis before the end of March. There must be some market participants lurking there, suggesting that the test of market lows is still in progress, as they did in April and May.

However, as MarketWatch columnist Mark Hulbert said, stock market forecasts “have no investment roadmap”, adding that they are mainly marketing documents for fund management companies.

The custom investment group has its own judgment on the stock market forecast, even more frank:

“We don’t pretend where Standard & Poor’s will trade twelve months from now. The goals of Wall Street strategists are almost always wrong in their forecasts.” BIG wrote in its 2021 Outlook report.

“The entire strategist game of setting strategic goals every year reminds us of Charlie Brown (Charlie Brown) trying to play football. He tried to do this again and again, but Lucy has other plans every time.”

Next week

Looking ahead, there is almost no US economic calendar for the last week of 2020. Since many people in the world celebrate the New Year on Friday, they are also abbreviated.

Tuesday, Investors will pay attention to the S&P Case-Shiller house price index in October, US Eastern Time, Wednesday It will see a report on advance trade in goods at 8:30 in the evening, manufacturing activity in the Chicago area at 9:45 in the morning, and houses for sale at 10 in the morning.

The last day of the last week of the year Thursday Finally, submit the weekly unemployment report at 8:30 am


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