A version of this post was originally published on TKer.co.
Wall Street’s top stock market strategists are telling clients where they see the stock market heading in the year ahead.
Some high-level themes I’m seeing in their reports: Stocks are likely to rise, but gains will be limited because valuations are high. Earnings growth should be strong, fueled by consumer spending and capital expenditures. Risks include supply chains issues persisting, labor shortages continuing, and monetary policy tightening more quickly than expected. Most of these outlooks were published before the Omicron variant emerged, but strategists generally agree that the economy is better prepared for new waves of Covid infections.
Below is a roundup of 14 of these 2022 forecasts for the S&P 500¹ including highlights from the strategists’ commentary. The targets range from 4,400 to 5,300. The S&P closed on Friday at 4,538, which implies returns between -3% and +17%:
Barclays – 4,800 (12/2/2021): “Household and corporate cash hoards should support modest earnings growth but persistent supply chain woes, reversal of goods consumption to trend and China hard-landing are key tail risks.“ (via Jonathan Ferro)
DWS, David Bianco – 5,000 (12/1/2021): “2022 returns driven by earnings growth. Higher volatility with potentially significant intra-year sector rotations depending on level of real yields.”
JPMorgan, Dubravko Lakos-Bujas – 5,050 (11/30/2021): “While there have been sporadic setbacks with COVID-19 variants (e.g. delta, omicron), this needs to be seen in the context of higher natural and vaccine-acquired immunity, significantly lower mortality, and new antiviral treatments… With this in mind, the key risk to our outlook is a hawkish shift in [central bank] policy, especially if post-pandemic dislocations persist (e.g. further delay in China reopening, supply-chain issues, labor shortages continue).” (via MarketWatch)
Yardeni Research, Ed Yardeni – 4,800 (11/28/2021): “Assuming, as I do, that Omicron, the new variant of Covid, will turn out to be no worse than the Delta…
..
