Market Targets from January 2020

2020 was the year of COVID.  There was a steep market drop and a volatility shock in February and March as investors and businesses struggled to predict the impact of the novel coronavirus. By the latter half of the year, it was clear that the virus’ impact was going to be terrible for public health and damaging to key elements of the economy. But, it was not going to stop the gears of global growth entirely.  Forward looking investors have their eyes set to a future where mass vaccinations have rolled out and business can resume, mostly, as normal.  In the meanwhile, several industries – leisure travel and personal services, for instance – are only likely to slouch along until the darkest days are behind us.

For all of the anxiety generated by the public health crisis, some of the largest technology companies were well suited to thrive and accelerate their expansion during the COVID crisis, pushing growth and core indices to new highs.  You wouldn’t know it by looking at the securities markets, but we are still in the midst of a declared recession.  As a reminder, here are the Wall Street 2020 S&P 500 targets which we presented a year ago.

 Here are the current 2020 S&P 500 targets. 

The S&P 500 was at 3229 on January 1^st, 2020.  The S&P 500 hit 3756 on December 31, 2020.  Despite the steep pullback in the first quarter, the S&P hit all-time highs in the fourth quarter, besting the optimistic forecasts.  While there remain pockets of weakness in the economy and in several securities markets, the broad US stock market managed to beat expectations. 

The Updated Market Targets for 2021

Again, we started on January 1^st, 2020 with the S&P at 3756.

Here are the current 2021 S&P 500 targets. 

Source: Dow Jones Market Watch, Barron's,Yahoo Finance

Economists generally believe that the market advance is predicated on optimism for an economic recovery.  Generally, the mood is positive, but there are concerns that much of the melt-up is due to returns pulled from the future and accommodative monetary policy.  Only time will tell how close these predictions will match reality.

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