Why Wall Street is still divided on 2023 stock-market outlook as S&P 500 enters new bull market

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Halfway through 2023, Wall Street strategists still cannot agree on their yearly forecasts for the S&P 500 index. The dispersion of their opinions has become...

Halfway through 2023, Wall Street strategists remain widely divided in their year-end forecasts for the S&P 500 index.

The dispersion has only become more extreme as the large-cap benchmark this month exited from its longest bear market since 1948. The difference between bearish and bullish Wall Street targets on the S&P 500 has been unusually high this year. The spread between the most bullish and bearish S&P 500 year-end price targets was the largest on record in early 2023, according to Toronto-based AlphaNorth Asset Management, citing Bloomberg data.

Some forecasters, including strategists at Goldman Sachs, Bank of America and Evercore ISI, hiked their year-end price target for the S&P 500 to around 4,500 from around 4,000 earlier this year, citing the artificial intelligence boom that’s fueled a resurgence in a flurry of technology stocks, and resilient economic growth.

The estimates put the average target for the S&P 500 index at 4,113 for the end of 2023, a decline of 5.9% from Tuesday’s close of 4,369.01. Last Thursday, the large-cap benchmark met the criteria for exiting a bear market, after ending more than 20% above its October closing low.However, many market strategists cannot decide if this so-called bull market is real.

Demmert thinks the U.S. market is overdue for a 10% correction. The stock market at large is still in “overbought territory” and investors are very complacent, he said, which was the case prior to the past three major declines within this 18-month bear market.

 

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