Stock market professionals are having a hard time imagining a fall in the S&P 500 in 2021

Goodbye, 2020. Hello, 2021.

It is progressive and potentially ascending, Superman-style, for the US stock market next year, based on analysts’ ambitious year-end goals for the S&P 500 index.

No stock market analyst MarketWatch researched for this report predicts a retraction from current levels, already considered high by more than some market experts, as investors enter a crucial phase of recovery from the worst pandemic in more than a century and a new presidential regime under President-elect Joe Biden, who will take the oath of office on January 20.

Despite the annoying fears that valuations and, in particular, values ​​for large-cap technology companies, will be perfectly priced, with some companies like Tesla Inc. TSLA,
+ 2.44%,
representing a paradigm of Wall Street’s anxieties about market bubbles, many see stocks going in only one direction next year: skyward.

Read: The stock market is rich, but it may be at a ‘much more reasonable valuation level than traditional measures suggest’

Analysts are hesitant with the notion that the bullish stock market is running out and are instead offering estimates for earnings at the end of the year 2021 and, in some cases, projecting impressive highs for the market in the next 12 months.

Dubravko Lakos-Bujas from JPMorgan Chase arguably offers one of the most challenging gravity predictions for the S&P 500 at 4,400, which would represent a breathtaking increase of almost 19% for the benchmark.

To put that in perspective, the S&P 500 SPX,
+ 0.35%
already recorded a gain of almost 15% in 2020, the Dow Jones Industrial Average DJIA,
+ 0.23%
is moving towards a 6% increase in the year to date, while the high-tech Nasdaq Composite Index COMP,
+ 0.26%
is on track for a 43% gain in 2020. And don’t even start with the mind-boggling gains achieved by the main stock benchmarks from the March 23 low for the year.

And it’s not just bulls like Dubravko Lakos-Bujas and the handful of other strategists that MarketWatch consulted this year, the stock analyst community as a whole is having trouble imagining a world in which the S&P 500 ends lower next year. .

Analysts’ goals for the end of the year 2021 of the S&P 500



Goal 2021

Dubravko Lakos-Bujas

JPMorgan Chase


Kristina Hooper



David Kostin

Goldman Sachs


John Stoltzfus



Brian Belski



Keith Parker



Maneesh Deshpande



Julian Emanuel



Sam Stovall



Binky Chadha

German bank


Mike Wilson

Morgan Stanley


Darrel Cronk

Wells Fargo Investment Institute


Tobias Levkovich



Savita Subramanian



Barry Bannister


3,800 (in spring / summer)

The average target price at the end of the year for the S&P 500 index in 2021 is 4,027.21, according to FactSet data, starting at noon on Thursday, representing an increase of about 9% in the level of closing of the broad market index in the shortened week of the holiday just past.

Source: FactSet

It may be difficult to blame the almost unbridled enthusiasm for what is to come in 2021, after a year marked by the immeasurable tragedy of the COVID-19 pandemic.

Overall, the US reported a total of 18,495,851 cases and 326,871 deaths as of Thursday noon, data from Johns Hopkins University show. In addition, more than 22 million people lost their jobs during the worst of the United States epidemic, bringing the economy to its knees.

Kristina Hooper, who maintains one of the most optimistic market prospects for 2021, said that progress in launching COVID vaccines and medicines has encouraged bulls, and supporting all past and future purchases is the Federal Reserve, which has promised to keep interest rates stable near 0% until at least 2023 and continue to buy bonds and monetize the US federal debt.

“I hope that many gains will occur in the first half of 2021, discounting a strong economic expansion, once vaccines are widely distributed,” Hooper told MarketWatch on Thursday afternoon by email. “I also expect the Fed to remain extremely accommodated, which should support risky assets, especially stocks,” she said.

Sam Stovall of CFRA, whose 2021 S&P 500 target, approaching the median range of FactSet, offers a relatively sober assessment of the stock outlook at 4,080.

Stovall told MarketWatch that “optimism abounds”, referring to his 2021 research perspective report, and says the target is justified by the Fed’s expected easy-money policies and the hope for more government fiscal aid for maintain the fragile economic recovery on the tracks and the viral outbreak on the ropes.

“As we approach the dawn of 2021, optimism abounds,” he wrote. “A new administration will be installed at the beginning of the new year, with the possibility of a unified Congress supporting it, offering the prospect of additional fiscal stimulus, together with the Federal Reserve, which has pledged to do ‘whatever it takes’,” he said, referring to the now famous pledge by former European Central Bank President Mario Draghi in 2012 to preserve the euro in the height of the eurozone debt crisis.

BTIG’s Julian Emanuel and Michael Chu say the coming year will represent an epic “wealth redistribution” where small cap stocks can outperform larger cap growth and value growth on an annual basis, ending a fallow period years for undervalued stocks. This dynamic should bring the broader market to the fore, the pair predicted.

BTIG explains it this way:

ExcerPT BTIG’s outlook 2021

Synchronized global growth underpinned by the ease of the central bank and a Washington that sees the decidedly mixed results of Election 2020 as a catalyst for cooperation (spending is necessary) and the centrist government (without tax increases) results in a Redistribution of Wealth consistent with the synchronization of the 2003-06 period of reflection in which Value overcame. Growth, Small Cap outperformed Large Cap, and international stocks outperformed the S&P 500.

It is important to note, however, that stock analysts were nowhere near the mark in their projections for 2020, assuming the S&P 500 maintains its current levels during next week’s abbreviated holiday trading.

Piper Jaffray’s Craig Johnson was the closest to the current 3,700 range of the S&P 500, with an initial year-end goal of 3,600, reported Chris Matthews of MarketWatch.

To be fair, a pandemic is a difficult thing to predict and few, if any, would have been able to adequately assess how the market would react to the public health crisis before the end of March. Certainly, there are some market participants lurking, suggesting that a test of market downturns is still at hand, as they did here in April and here in May.

However, as MarketWatch columnist Mark Hulbert says, stock market forecasts “are not investment roadmaps”, adding that they are primarily marketing documents for fund management companies.

The Bespoke Investment Group provides its own opinion on the stock market forecasts with even more candor:

“We do not intend to know where the S&P will be negotiating in twelve months. The targets of Wall Street strategists are almost always wrong in their predictions, ”writes BIG in its 2021 outlook report.

“The whole game of strategists providing year-end goals each year reminds us of Charlie Brown trying to kick a football. Time after time, he tries to get it right, but Lucy always has other plans. ”

The following week

Looking ahead, there is little on the U.S. economic calendar in the final week of 2020, which will also be shortened as much of the world celebrates the New Year on Friday.

Tuesday, investors will be aware of the S&P Case-Shiller residential price index for October at 9 am Eastern Time Wednesday you’ll see a report on the early merchandise trade at 8:30 pm, a reading of manufacturing activity in the Chicago area at 9:45 am and pending home sales at 10 am

The last day of the week and year in Thursday concludes with a report on weekly unemployment claims at 8:30 am