"Next Year US Stock Market to Reach All-Time High... Expected to Hit 5400 Level (Comprehensive)"

Wall Street Bullish Yadeni Outlook
Breaking Pandemic Highs
Bloom "Rise to 4808 Next Year"
Biggest Threat Is Weak Consumer Spending

There is a forecast that the U.S. stock market will experience a boom next year surpassing this year's performance. Along with the expectation that the S&P 500 index will break the high point recorded during the COVID-19 pandemic, it is predicted that it could soar to the 5400 level by the end of next year.

Next Year’s Stock Market to Surpass COVID-19 Rally Peak

On the 10th (local time), Bloomberg conducted a Market Live Pulse survey targeting its terminal and news subscribers. Respondents expected the S&P 500, one of the representative indices of the New York stock market, to rise to 4808 points next year. This represents an increase of more than 4% compared to the current level. It surpasses the previous all-time high of 4797 points recorded during the COVID-19 pandemic rally in January 2021. The Market Live Pulse survey was conducted from the 4th to the 8th and received 518 responses.

Anika Gupta, a macroeconomic researcher at WisdomTree, explained, "The U.S. stock market’s solo bull run will remain firm," adding, "Favorable economic conditions and improved corporate earnings estimates compared to other major countries such as Europe and China, along with attractive valuations, will act as drivers for the stock market’s rise."

The main risk factor cited for this outlook was weak consumer spending (33%). Respondents who pointed to a hard landing of the U.S. economy as a threat accounted for a similar proportion (31%). Those who said inflationary pressures could re-emerge made up 25%. Notably, more than two-thirds of respondents believed the likelihood of a U.S. economic recession next year was low. It was also anticipated that the U.S. central bank, the Federal Reserve (Fed), would begin cutting interest rates before July next year.

Optimism on Wall Street... Mixed Outlook for Big Tech Investments

Wall Street also expressed optimism, citing that the negative impact of high interest rates has already been fully reflected in this year’s stock market, and forecasted that the U.S. stock market could reach an all-time high next year. John Stoltzfus, Chief Investment Strategist at Oppenheimer Asset Management, a leading bullish camp on Wall Street, predicted in an investor memo on the 11th that "the S&P 500 index will settle at 5200 points next year."

The 5200-point forecast he presented for next year represents a 13% increase from the current level and more than an 8% rise compared to this year’s peak. He surprised the market by forecasting earlier this year that the S&P 500 would reach 4400 points at a time when the market was collapsing due to sharp interest rate hikes. The S&P 500 index has risen 19% so far this year.

He said, "Next year will be a year to explore the timing of changes in the Fed’s monetary policy stance," and added, "The market’s expectation that interest rate cuts will occur in the first half of next year is too optimistic." He further diagnosed, "Given that inflationary pressures still remain, the timing of interest rate cuts could be delayed until the fourth quarter of next year."

Another Wall Street bull, Ed Yardeni, CEO of Yardeni Research, also projected the index to reach 5400 points by the end of next year and 6000 points by the end of 2025.

Regarding big tech investments that heated up the stock market this year, opinions were divided. Stoltzfus expressed a buy recommendation, saying that large big tech stocks and cyclical stocks that led this year’s rally will continue to show an upward trend next year. Shanti Kelemen, Chief Investment Officer (CIO) of M&G Wealth, pointed out, "I do not expect the big tech rally to continue in the long term," adding, "Traditional industries that can improve productivity through AI adoption have greater potential."