The two-year bull market may be coming to an end in 2025, or perhaps taking a pause, according to the latest projections from researchers at Goldman Sachs and Bank of America.will end 2025 at 6,500, which is in line with what most other Wall Street experts have suggested. This week, analysts at Bank of America called for the S&P 500 to finish the year at 6,666.
If the S&P 500 finishes lower this year, the 2025 gain would obviously be higher, and vice versa. Thus, it’s impossible to put a percentage gain on it until the end of 2024.The analysts see continued strong corporate earnings growth in 2025. Goldman Sachs researchers predict 11% growth for the S&P 500 next year, while BofA targets 13% growth in 2025. That would be up from the projected 9% earnings growth rate in 2024, according to FactSet.
“The impact of these policy changes on our earnings-per-share forecasts roughly offset one another,” Goldman Sachs Chief U.S. Equity Strategist David Kostin wrote in the report. The P/E of the index is currently at around 27, which is well above historical averages and the highest it has been since June of 2021. The P/E of the“An equity market that is already pricing an optimistic macro backdrop and carrying high valuations creates risks heading into 2025,” Kostin wrote.
That’s because a larger percentage of their earnings come from domestic sources, about 75%, compared to Magnificent Seven companies, which derive about 50% domestically. And more restrictive trade policy would likely have more of an impact on non-US growth. Both Deutsche Bank and Yardeni Associates forecast the S&P 500 to hit 7,000 by the end of 2025. That would be about a 15% increase over the current level.
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