Are Strategists Now Bearish for the Rest of the Year?

That's at least what their collective S&P 500 price target shows. At the start of the year, the average year-end S&P 500 price target was 1,049.9, which converted into a gain of 16.2%. After lowering their estimates as the market tanked and then upping them when the market turned around, the consensus year-end target currently sits at 1,022, which is actually 0.58% below the actual S&P 500's level of 1,028. Based on the weekly Bloomberg survey of the strategists listed below, JP Morgan currently has the highest year-end price target at 1,100, while Morgan Stanley has the lowest at 900. The only question now is whether strategists will stick to their guns and ride out the rest of the year with their current targets, or raise them to keep up with a rallying market.

click to enlarge

Comments

[drewriders:]

The year isn't over. I expect at least a small sell off by the end of the year.

Aug 25 05:13 PM

[whidbey:]

For a time we must expect the trend to hold. Nothing fails in simple ending. It takes time to realize what is happening and learn to follow.

But later we also know that the failure of the stimulus policy must reach the market, then the direction will reverse with a roar.

What worries me is that rally at a level that historically is the turning point. We must worry about the related patterns the analysts are seeing.

Aug 25 05:28 PM

[Zeon:]

Are these the same analysts who in early 2008 predicted the S&P to end the year at ~1675 when it actually ended around 930? Yeah, I'll be consulting them before making my next trade.

Aug 25 06:21 PM

[AussieTim:]

they all have vested interests and/or no more idea than the rest of us.

Aug 25 06:54 PM

[Niner:]

What the heck guys. I'll call 1240. That's based on the reverse head and shoulders pattern that has formed in both the S&P and the Dow weekly charts..............

Aug 25 07:04 PM

[conceptwizard:]

I'll go with the 500 S&P that Sprott managemet has in a best case scenario.

Aug 25 08:10 PM

[BullnBear:]

I don’t think that it’s too much of a reach to suggest that we pull back before year end and as a matter of fact it would be a pretty safe bet.

We haven’t had a great number of markets move this much, (from March lows), in such a quick time so a pullback will probably be in order, question is from what levels?

Aug 26 12:01 AM

[Roger Knights:]

I'm guessing S&P 775 by year-end.

Aug 26 12:13 AM

[Windwood Tr...:]

The rise and fall of the S&P target is merely a function of the PE ratio applied to the index. If earnings are expected to increase rather than continue to fall as is what's generally happening then the target will naturally rise. The historical ratio is the fuel for this engine's thought processes.

Aug 26 08:43 AM

[David Van K...:]

I'll bet every one of these strategists has his (there are no women listed) own secret algorithms for predicting the S&P many months out. Certainly, as Windwood suggests, in the end you've got to predict (that is, guess) the aggregate earnings for the 500 stocks, manipulate that number as S&P does to normalize it for the index (thus creating a fictitious "S&P earnings" number), then mulitply that by a predicted (that is, guessed) P/E ratio to arrive at your final prediction.

Too many moving parts for me. What I'd love to see is a decade-long chart of the accuracy of these long-range predictions versus how the index actually ended up each year. I bet it'd show a bell curve around random guessing. Call me if you find one analyst that's been uncannily accurate at this game year after year.

Aug 26 09:56 AM