High Expectations for the S&P 500 Index

Although some of the most prominent analysts on Wall Street have seen U.S. stocks to deviate slightly from the original expectations so far, some remain focused in their objectives, expecting the S&P 500 index will close this year even with gains of 30%. The average forecast by 13 top analysts on Wall Street refers to a 16% rally of S&P 500 by the end of the year, closing at 1229 points, according to Reuters’ analysis.

However, one of five analysts have downward revised their forecast after amid concerns that the U.S. economy enters a new recession period once again. Suffice it to say that the S&P 500 index has decreased about 14% since its highest peak while for 2010 it records losses of 5%.

Nevertheless, David Bianco, a strategic analyst of Bank of America states that the market has already anticipated the possibility of a new recession – a possibility which he thinks is unlikely to happen -and therefore, he doesn’t revise his original estimations that the index will close the year at 1300 points – one of the highest goals in the Wall Street.

However, the highest estimation for the S&P 500 index is offered by Binki Tsanta, analyst for the Deutsche Bank who expects the index to close at 1375 points, which means that it will rise by 30% by the end of the year!

Last month, the analyst pointed out that 120 units of the earnings of S&P 500 would come from positive macroeconomic data, such retail sales and durable goods, in the U.S. However, his estimations were not correct as the results were disappointing.

The S&P 500 index is currently around the psychological barrier of 1,050 points. Many analysts believe that there will be a period of instability if the markets open lower than this level. On the other hand, if investors decide that the U.S. economy is not heading for recession, then the market would move upwards.