Stock Market Forecast for the Next 6 Months
The six-month forecast period puts us past the 3 month spring period through to June where the economy might be picking up significant speed.
Forecasts for the Dow Jones average for any time in the coming year are very scarce. It seems bank and investment company analysts are a little shy about forecasting these days. Some forecasts ranged from 34,000 to 40,000 however we’re already at 45,000 today. If we add 10% for year-end 2025 (8% for the S&P), we arrive at near 50,000.
That would have been an outlandish number for most forecasters, but the reality is the Trump election will fuel significant growth for US companies.
Waiting for 2025
Forecasts for the 3 to 6 month period is one of acceleration, boosted by the euphoric Santa Claus year end rally now already picking up steam. For Dow Jones listed companies, deregulation, lower oil costs, reduced taxes, tariffs and lower interest rates all add up to the risk reduction policies they need.
The Dow hit a surprisingly high 45,000 today and the real potential of these companies haven’t really been exploited as yet. 2025 will create the ideal situation for these companies.
We’re between our three-month outlook and the end of 2025 forecast, and the bull market trajectory could play out in a fluctuating manner, not linear. After the year end rally we might see a brief January profit-taking, consolidation dip, we’ll see investors become more certain about risk and returns when President Trump is sworn in as the 47th President of the United States.
The Impact of this President’s Inauguration
The presidential inauguration is easily the most important investment event, because it makes formal all of the pronouncements Donald Trump has made, and where he will pass more than the 44 bills he delivered in his last term. This new era will really start to sink in for all investors and American workers.
Currently, there are doubts being sewn by detractors and wall of worriers, and of course the Democrat media and Democrat corporations. The struggle for control will formally end this spring, and markets will smooth out and rise through 2025.
Already, President Trump is warning bad actors across the world, and in Democrat governments that oppose free market principles, American prosperity, illegal immigration, and fair trade practices. He and Elon Musk are planning to cut government spending and harmful regulations, cut taxes and lower energy prices. Combine that with FED rates cuts, and you can see the business sector looking better, particularly small businesses and millions of micro-businesses. That all points to increased wages and consumer spending which drive growth.
That’s why we need to tackle the forecast challenge ourselves.
Forecast for majors for end of 2024:
- S&P: 6000
- NASDAQ: 20,000
- Dow Jones: 43,000
- Russell 2000: 2450
Some may have thought those estimates were crazy. And remember last year, when Tom Lee of Fundstrat forecast of 4750 for the S&P? The forecasts have already been eclipsed. Which brings us to why. Why have the forecasts been under the mark? It appears they don’t believe this bull market miracle can happen or they don’t believe the US can heal its financial wounds. But investors seem to be very optimistic which is pushing S&P forecasts up to 7000 by year end and 10,000 by 2030.
Biggest Factor of all: $5 to $6 Trillion in money markets will have to move once interest rates fall. Investors won’t hang onto low-return bonds and treasuries as inflation stays at 3+%. That massive wealth will explode every area of the stock market with AI stocks such as Nvidia, AMD, along with Bitcoin ETFs rocketing upward. At lower rates, the US dollar will fall just as the world embraces Bitcoin.
Goldman Sachs has little faith in the Magnificent 7 stocks and believes their earnings will fall in the coming years while the S&P 493 surges in performance. The outlook for all small businesses on the S&P and Russell 2000 is promising driven by lower interest rates, taxes, and energy costs. However, there’s no reason why the Mag7 are going to suffer. The DOJ’s anti-trust action may fall flat on its face with no action at all.
Good Stocks to Buy
Take a look at the latest list of best stocks to buy.
A prediction for the economy is one of strength given a new pro-US economy is developing, driven by leadership in AI technology, advanced microchips, massive US energy output, and demand from a massive Millennial and Gen Z population who have delayed much of their lives due to political survival tactics by the Democrats. D’s have tried to suppress demand as part of their political platform, but it’s normal human demand and can’t be stifled for long. It will take some time for Millennials and Gen Z’s to propel the coming spending boom, but by next summer, we should see some of that latent surge.
The fact that American consumers and businesses have money is one thing ($5 to $6 Trillion in money markets), but being able to borrow again at low rates, and refinance debt and obtain home loans at a much lower rate will free up a stunning amount of money for other purchases. That may include automobiles, travel, and a home purchase. For sure, the housing market will get heated as buyers compete within a grossly undersupplied real estate market with much lower mortgage rates.
It’s likely President Trump will try to move rates downward to get the economy rolling, and get new investors more involved in the US economy, and boost small business, even at the risk of creating some inflation. With him, big imperatives will drive his bills and rhetoric.
Threats in 2025
The U.S. debt and trade deficit are no laughing matter, yet the government can and will print money to kick the can down the road. The massive Uturn to pro-US business and investment in AI will give this country global leadership again and with imports falling and exports rising (lower USD aids exports) and a lower FED rate will supercharge the economy.
The FED only cares about itself, but at some point, they will have to choose between fussing over a 3+% inflation rate and holding back an angry country and economy that wants to roar.
6 month timeframe for the DOW, S&P, NASDAQ and Russell Indexes. is a good one for what’s expected to be a hot period, the last 6 months leading to what might be a record holiday season.
The final word on the forecast for the stock market is for solid growth due to easing regulation, US protectionism, continued infrastructure spending, lower taxes, and growing consumer spending.
