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stocks predicted to decline in 2025 amid inflation and economic slowdown
Stifel's chief investment strategist, Barry Bannister, predicts the S&P 500 will end 2025 in the mid-5,000s, citing sticky inflation and an economic slowdown as key factors for a market pullback. While he is the only strategist forecasting a decline, others anticipate a mid-year rally to 7,000 before a drop to 6,600. Bannister emphasizes a shift towards defensive sectors like Healthcare, Utilities, and Staples amid a challenging economic environment.
diverse predictions for 2025 stock market outlook spark cautious optimism
Wall Street's predictions for the 2025 stock market are mixed, with the S&P 500 year-end price target averaging 6,539, indicating an 8% potential increase. However, forecasts range from a 26% drop due to a recession, as suggested by BCA Research, to bullish outlooks from firms like JPMorgan and Goldman Sachs, which anticipate continued earnings growth and price targets up to 7,100. Caution remains as analysts warn of potential corrections and economic threats later in the year.
bears predict stock market decline in 2025 amid economic concerns
Stifel and BCA Research are the last bearish firms on Wall Street, predicting a down year for the S&P 500 in 2025. Stifel anticipates a 10%-15% correction due to extreme valuations and a slowing economy, while BCA forecasts a 27% decline, citing fading pandemic-era spending and recession risks. Both firms highlight high stock market valuations as a significant concern.
Bill Smead, founder of Smead Capital Management, emphasizes a concentrated investment strategy focusing on resilient companies amid market volatility, drawing parallels to past market cycles. He highlights Warren Buffett's recent stock sales and cash accumulation, suggesting a cautious outlook on equity risk premiums and future returns, reminiscent of the late 1990s. Smead and strategist Barry Bannister warn of potential market corrections as corporate profits soar relative to GDP, echoing Buffett's concerns about high valuations and investor psychology.
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