At the start of each year, the chief strategists at Wall Street firms analyze dozens of variables and make bold prognostications for the year ahead. They distill all of their conclusions into one simple number -- the S&P 500, and where it will reside one year hence.
As these strategists were putting their forecasts together, they surely noted that the S&P 500 was marching nicely higher. Trouble is, it keeps moving up and is starting to already breach the more conservative forecasters on the Street.
More than a few of these folks predicted the S&P 500 would end the year around 1,325. We've already surpassed that mark, and we've got 11 months to go! To be sure, other folks see a brighter finish. Here's a small sample of key market strategists, along with their year-end forecasts for the S&P 500.
Wells Fargo (NYSE: WFC)
December 2012 S&P 500 target: 1,325
This forecast was issued in early December 2011, and has already gotten one factor wrong. "Stocks seem destined to start the year troubled by ongoing sovereign debt struggles in Europe, waiting for another jolt from policymakers," was their off-the-mark prediction. To be fair, many investors had been waiting for another shoe to drop from Europe. And who knows, it still may happen.
Meanwhile, that cautious backdrop has possibly helped, as stocks have "climbed a wall of worry." In effect, most rallies only come when a group of investors takes a bearish view and stocks get underpriced as those worries filter in. Worries about Europe have receded, which counter-intuitively, is a bearish sign because there is no wall to climb.
NEW TIME Today, at 9:30 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for January 28th 2014 | John Ransom
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