Its that time of year again. New Years has passed and everyone is going back to work. Time to make your predictions for the upcoming year.
Large investment banks publish their prediction of where they think the price of the market will end the year. They will choose an index such as the S&P 500 or the Dow Jones or the NASDAQ and predict the price at the end of the year. The most popular index we see used is the S&P 500 as most believe it's the best gauge of the market. Many people still use the Dow Jones as the indicator of the overall market, the weakness of the Dow Jones is that it consists of only 30 stocks and they are some of the largest blue-chip names. The NASDAQ is focused more on technology names. The S&P 500 does the best job of looking at the total stock market.
Where do banks think we will finish out 2022? Below is the most current list of year end price targets by some of the largest investment banks in the world.
2022 S&P 500 forecasts:
Oppenheimer 5330
Bank of Montreal 5300
Deutsche Bank 5250
Credit Suisse 5200
Goldman Sachs 5100
JP Morgan 5050 Royal Bank of Canada 5050
Citi 4900
UBS 4850
Cantor 4800
Barclays 4800
Wells Fargo 4715
Bank of America 4600
Morgan Stanley 4400
Our S&P500 year-end 2022 target equals 5100. Supply chains are beginning to normalize, labor market tightness will persist, bond yields will rise and fast- growing stocks valued entirely on long-term growth expectation are vulnerable. Kostin, Goldman Sachs
We reiterate our 2021 S&P 500 price target of 4600, and are initiating 2022 at 5000. This represents 3.7% upside through year-end 2021, and 12.7% through year-end 2022 - Credit Suisse
“We are raising our 2022 year-end S&P 500 index price target to 5,100. This is relative to the 4,900 forecast set at the end of October and is triggered by a 5% index rally over the final two months of 2021” Citibank
“Our view is that 2022 will be the year of a full global recovery, an end of the pandemic, and a return to normal economic and market conditions we had prior to the COVID-19 outbreak. Our 2022 price target for the S&P 500 is 5050.” Kolanovic, JP Morgan
Though it is a fun exercise to predict where we think the market will go, these estimates are just that: estimates. They cannot predict the Black Swan events like Covid, the Mortgage Crisis, or Black Monday. Very often they adjust up and down throughout the year to reflect the current conditions of the market. At its current level of just under 4700, Bank of America’s estimate of 4600 represents a decline of roughly 2%. The analyst wrote that there were too many similarities to the 1999/2000 Dotcom Bubble. Conversely, Goldman Sachs has a year end target of 5100 which would suggest a more than 8% rise from where we are today. Again, we will wait and watch the forecasts adjust throughout the year.
Where do you think the S&P 500 will finish 2022? Comment Below.