Recession fears and market predictions have caused a lot of worries, resulting in decreased stock purchases. Wall Street strategists often set the 10% annual return for the S&P 500 as their target when they release their investment outlooks.
Historically, the stock market has been a good indicator of how the economy is doing. However, this year there’s been a significant dip as more and more predictions for 2023 show an unusually gloomy outlook for the S&P 500.
It’s possible that the negative outlook has been driven by fears of an imminent recession, as some people are worried about the huge increase in interest rates. There is also a concern that family budgets will be impacted by inflation.
Wall Street is not alone in this. A survey from the Conference Board found out that 98% of CEOs expect a recession sometime in 2023.
Data from Bloomberg shows that, despite a potential recession, Wall Street has been bearish on stocks for the next year. But guess what? 2023 is the first year in more than 20 years that strategists actually expect a flat year.
Amidst the 2009 financial meltdowns, experts predicted a 10% annual return for stocks.
Wall Street traders are concerned about stocks because the S&P 500 is on track to end the year lower than 15%. The constantly changing market this year has caused investors to be more pessimistic about future rallies.
To get an idea of what Wall Street strategists think about where the market is headed, let’s take a look at their predictions. The average price target from 17 analysts surveyed is 4,009, or only 1% up from current levels.
One analyst predicts that the S&P 500 will fall to 3,491, which is a 14% decline or 3,400. This would take the S&P 500’s low from October to its lowest point so far.
We can see that Deutsche Bank has the highest year-end target of 4,500. If we reached this level, the stock would have upside of 14% from current levels.