NEW YORK - The S&P 500 will gain 7.5% between now and the end of 2022 to finish at 4,910, driven by earnings and economic growth that will extend the year's rally, according to the median prediction in a Reuters poll of strategists.
Wall Street has been saying that there are growing concerns about the effects of a new coronavirus variant, and that is why the upbeat forecasts come even as rising concerns about the picture for the near term. com markets europe wall-st-lower taper-acceleration worries-pile onto-viruses angst - 2021 -- 11 -- 30 fell sharply on Tuesday, partly due to concerns about the Omicron variant.
The S&P 500 is up over 21% in 2021, benefitting from an economy reopening from the Pandemic lock downs.
The benchmark S&P 500 will gain 7.5% from Tuesday's close of 4,567 to end the year at 4,910, according to the median forecast of 45 strategists polled by Reuters over the last two weeks.
That forecast is higher than the 4,725 forecast in the late August Reuters poll, although many of the latest forecasts for 2022 were given before the Omicron news.
It's going to slow down next year, but it's going to be stronger than the trend for the economy, and that's likely to extend the bull market, according to Ryan Detrick, chief market strategist at LPL Financial, which has a 5,050 year-end 2022 target on the S&P 500.
According to the poll, the Dow Jones industrial average will finish at 37,500 next year, up about 8.7% from Tuesday's close.
While profit growth is expected to be well below the blowout growth seen this year when businesses bounce back from the pandemic, some analysts think consensus views may be underestimating strength.
Brian Belski, chief investment strategist at BMO Capital Markets, said this week in a virtual chat for his year-ahead outlook. Analysts are still behind the eight ball. He predicts that the S&P 500 will end at 5,300 by the end of 2022.
Earnings expectations were improving over the next six months, according to strategists in the poll.
In the recent earnings season, higher costs from supply chain disruptions and labor prompted warnings from companies, but many companies have been able to pass costs on to consumers.
Wall Street analysts believe S&P 500 earnings will grow 7.9% in 2022, compared with 49.3% growth in 2021, according to I B E S data from Refinitiv.
Many strategists viewed a correction or a pullback in the S&P 500 as likely in the next six months.
Federal Reserve Chair Jerome Powell has been the subject of a series of concerns, including the latest reasons for concern, as well as the latest reasons for concern, according to the latest evidence available at: www.reuters. com markets us powell-yellen head-congress inflation-variant risks-rise -- 2021 -- 11 -- 30 signaled Tuesday that the U.S. central bank would consider speeding up its withdrawal of bond purchases as inflation risks increase.
The Fed began reducing its purchases of Treasuries and mortgage-backed securities earlier this month, which would put it on track to complete the wind-down by mid- 2022. The program was introduced in early 2020 to help the economy through the Pandemic.
In a video presentation this week, Savita Subramanian, equity quant strategist at BofA Securities, told investors that the focus should be on companies with more stable and growing dividends that will benefit the large-cap space, rather than be hurt by inflation. She said that they like energy and financials for inflation-protected dividends.