Before you put a lot of faith in the major strategists’ market outlook for 2025, there’s a reason to think that even the smartest minds on Wall Street can be wrong. According to CNBC Pro’s Market Strategist Survey, the average forecast for 2025 by 15 widely followed Wall Street strategists is 6,630 points, equivalent to about 10% growth next year. This expected return is consistent with the historical returns of the broad market in any given year. But Juan Correa, global asset allocation strategist at BCA Research, questioned Wall Street’s outlook and said the forecast range was too narrow. What’s more, he points out that markets don’t actually produce average returns very often. “There’s a paradox in the stock market: Average returns don’t often. However, what usually ends up happening is that “the S&P 500 likes to go to extremes,” Correa wrote. Looking at the S&P 500’s annual total returns since 1926, BCA Research said the market has only returned about two out of five years, or 40% of the time, at the average target for sell-side companies. If you exclude the outliers (the first two and the last two forecasts), that number drops to just 17%, meaning the strategists had less than a five-year chance of getting it right. .SPX YTD Mountain S&P 500 That’s why BCA Research believes the stock benchmark is more likely to fall below 5,500 or rise above 7,100 than to stay within Wall Street’s forecast range. “So our negative view is either very true or very wrong,” Correa said. The top target comes from Oppenheimer’s John Stoltzfus, who expects the S&P 500 to hit 7,100 next year, according to CNBC Pro’s market strategist survey. UBS’s Jonathan Golub has a minimum target of 6,400. The S&P 500 looks set for a strong 2024, up nearly 27% excluding reinvested dividends, and is on track for its best year since 2019. Investors have gained renewed optimism due to his market-friendly policies, while easing inflation, lower interest rates and softer energy prices have also provided support to markets. For the record, BCA’s own official year-end 2025 forecast is 4,450, coming from Correa’s colleague Peter Berezin, BCA’s chief global strategist and director of research. The BCA excludes its own objectives from research studies.
