Market Forecasts of 2018 and 2019 By: Gabriel PotterMBA, AIFA® 2019.01.18

Market Targets from January 2018

2018 was a year of being whipsawed by the market.  There were all-time highs in both January and October, and equally sharp corrections.  From a fundamental point of view, there was not a lot of change from the ongoing base case scenario of low inflation, steady interest rate increases, and moderate growth.  Early in the year, investors were flushed with cash and optimism as the corporate tax cuts increased profitability measures.  However, by the end of the year, some of the euphoria was replaced with volatility.  Investors started getting spooked by ongoing rancor and disputes with our trading partners and the stifling effect our policies were having on the global growth story. 

As a reminder, here are the Wall Street 2018 S&P 500 targets which we presented a year ago.

Analyst

Institution

S&P Forecast for 2018

Keith Parker

UBS

2900

Tony Dwyer

Canaccord Genuity

3100

Chris Harvey

Wells Fargo

2863

Sean Darby

Jefferies

2855

Binky Chadha

Deutsche Bank

2850

Jonathan Golub

Credit Suisse

3000

Steven Auth

Federated Investors

3000

Rob Sharps

T. Rowe Price

2775

David Kostin

Goldman Sachs

2850

Dubravko Lakos-Bujas

JP Morgan

3000

Tobias Levkovich

Citi

2800

Adam Parker

Morgan Stanley

2750

Savita Subramanian

Bank of A. Merrill Lynch

2800

John Stoltzfus

Oppenheimer

3000

Mike Wilson

Morgan Stanley

2750

Jeffrey Knight

Columbia Threadneedle

2750

John Praveen

Prudential

2925

Brian Belski

BMO Capital

2950

Source:  Dow Jones Market Watch, Barron’s

 

The S&P 500 was at 2790 on January 1st, 2018.  The S&P lost a lot of ground, mostly in the final three months, so the S&P 500 hit 2507 by the end of the year.  All in all, the S&P was down -6.2% during the year, a far cry from the positive results most analysts were hoping for. 

The Updated Market Targets for 2018

Again, we started on January 1st 2019 with the S&P at 2507.

Here are the current 2019 S&P 500 targets. 

 

Analyst

Institution

S&P Forecast for 2019

Keith Parker

UBS

3200

Lori Calvasina

RBC Capital Markets

2900

Edward Yardeni

Yardeni Research

3100

Saira Malik

Nuveen

2840

Barry Bannister

Stifel

2800

Chris Harvey

Wells Fargo

2665

Sean Darby

Jefferies

2900

Binky Chadha

Deutsche Bank

3250

Jonathan Golub

Credit Suisse

2925

Steven Auth

Federated Investors

3100

Rob Sharps

T. Rowe Price

2850

David Kostin

Goldman Sachs

2855

Dubravko Lakos-Bujas

JP Morgan

3100

Tobias Levkovich

Citi

2850

Maneesh Deshpande

Barclays

3000

Michael Wilson

Morgan Stanley

2750

Savita Subramanian

Bank of A. Merrill Lynch

2900

John Stoltzfus

Oppenheimer

2960

John Praveen

PGIM

3000

Brian Belski

BMO Capital

3150

Source:  Dow Jones Market Watch, Barron’s

There is a significant caveat you should be aware of.  December 2018 has been a miserable month for investors.  As a result, several analysts have significantly revised their estimates just in the few weeks leading into the New Year.  For instance, Jonathan Golub changed his original S&P 500 forecast from 3350 to 2925 in the middle of December.  As a result, there is a great discrepancy between the ranges of analyst forecasts because, while the fundamentals may not have changed too much in the past few weeks, the beginning point where the market could start certainly has.  We have tried to include the most up-to-date forecasts, but not every analyst has changed their target.

In theory, if markets and economics were perfectly correlated, the beginning point shouldn’t matter.  If the intrinsic value of the market is $1000 by the end of the year, then it should not theoretically matter if the market starts the year at $20 or $200.  All that matters is that the price would ultimately reflect the underlying value once all the information is known.  So, the rapid changing of analyst calls – given the scarcity of new data – should inspire some skepticism from our readers.  If nothing else, the incredible speed and extent of these revisions should give pause to any investor who places too much stock (pun intended) in these forecasts. 

DISCLOSURES & DISCLAIMERS:

The information contained herein has been obtained from sources that we believe to be reliable, but its accuracy and completeness are not guaranteed.  Westminster Consulting, LLC reserves the right at any time and without notice to change, amend, or cease publishing the information.  It has been prepared solely for informative purposes.  It is made available on an "as is" basis.  Westminster Consulting, LLC does not make any warranty or representation regarding the information.  Without prior written permission from Westminster Consulting, LLC, it may not be reproduced, in whole or in part, in any form. The information in this document is confidential and proprietary to Westminster Consulting, LLC including its business units and may be legally privileged. Any unauthorized review, printing, copying, use or distribution of this document by anyone else is prohibited and may be a criminal offense. Indices mentioned are unmanaged and cannot be invested into directly.  Past Performance does not guarantee future results.

 

 

 

 

 

 

 

 

 

Gabriel Potter

Gabriel is a Senior Investment Research Associate at Westminster Consulting, where he is responsible for designing strategic asset allocations and conducts proprietary market research.

An avid writer, Gabriel manages the firm’s blog and has been published in the Journal of Compensation and Benefits,...

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