Wall Street leaning toward 3rd year of double-digit S&P 500 gains

Investing.com -- Wall Street is increasingly optimistic about the S&P 500 's performance in 2025, with the potential for a rare third consecutive year of double-digit gains, according to the latest Sevens Report. 

Sevens notes that the bullish sentiment follows an impressive two-year run, with the S&P 500 achieving over 25% total returns for two consecutive years, a feat not seen since 1997-1998.

They explain that historically, three straight years of 10%-plus returns for the S&P 500 have occurred only five times since 1928. The most recent stretch was from 2019 to 2021. However, Wall Street strategists are not deterred by the rarity of such an occurrence. 

The Sevens Report says, "Using the index’s close on December 31 close of 5,881, 22 of 25 firms we observed (or 88%) are predicting 10%-plus returns in 2025," with the average forecast suggesting an 11.7% return.

Oppenheimer is said to be particularly optimistic, forecasting a 20.7% return with a target of 7,100, driven by strong fundamentals and the continued growth of AI technologies. In contrast, BCA Research presents a more bearish view, projecting a -24% return and warning of a potential global recession fueled by trade wars, says Sevens.

Despite the variance in predictions, the overall consensus leans toward another strong year for the S&P 500. 

However, the Sevens Report cautions against overconfidence, pointing out that major firms have underestimated the S&P 500’s performance in four of the past five years. 

"While I hope they’re right, I think it’s still wise to view the start of 2025 as one that’s likely to be more volatile and stressful than what we saw in 2024," the report concludes.

 

Source: Investing.com