Stifel predicts S&P 500 will rise 10% and then bottom in 2025 by Investing.com
A new market commentary from Stifel means that they are likely to experience another high leg followed by a major decline in 2025.
The firm's strategists predict that the index could see a 10% rise before reversing course next year, possibly retreating to levels seen in early 2024. This would see the benchmark US index rise to around 6,400.
Despite the positive sentiment surrounding the US economy and possible Federal Reserve interest rate cuts, the benchmark index is expected to decline by 26% to around 4,700 by 2025.
Stifel analysts argue that the current outperformance of growth versus value stocks is reminiscent of patterns that have historically preceded bear markets. The assessment comes amid concerns that if the Federal Reserve continues to cut rates in 2025 without a recession, it could prevent a return to the 2% inflation target, with investors ultimately holding the results.
Strategists expressed their views in a metaphorical way, comparing the market situation to a 'Groundhog day' reminiscent of the dot-com era. In addition, they warned that the effects of past market manias often resulted in poor returns over the next decade.
