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What the Experts Say about the 2021 Stock Market Forecast
While a lot of bloggers, stock market experts and financial advisors advise to ignore stock market forecasts and predictions, it makes sense to hear them out.
Some are wildly enthusiastic about the S&P, Dow Jones and NASDAQ, talking materials, biotech, technology, consumer discretionaries and cyclicals. Others are offering a dour outlook based on stock overvaluations, lingering Covid infections, massive debt, and even a potential stock market crash. One report discusses how markets often whipsaw after these kinds of price growth.
By simply noting and ranking positive and negatives, you might come up with your own market predictions. You would have to believe the flipside of the pandemic is going reignite spending, business investment, and hiring.
Significant pent up demand and pent up production should drive big GDP growth in 2021, especially in lieu of very low interest rates from the Fed. The question many might ask of the US stock markets is where money will go instead?
This chart from Yahoo Finance looks back at the crazy year of 2020, and behavior of the major indexes.
Investors Business Daily Predictions
IBD says the stock market will be defined by the lingering effects of the Covid 19 virus and things may not go as smoothly as investors expect. They believe the stock market has already priced in a strong economic recovery and the ending of the Covid 19 pandemic. Investors see high expectations and disappointment wreaking some havoc in 2021 investors.
Motley Fool Predictions
Matthew Frankel (TMFMathGuy) of the Fool, sees the economic reopening happening faster due to increasing vaccinations. He notes that more vaccines will be available (the glut Jim Cramer spoke of). The reopening stocks (those hurt by the pandemic) will race back fast. He mentions Airlines, Realty Trusts, Malls as big performers. His S&P forecast is for a reduction in 2021, because the big caps benefited from the disappearing stay at home economy.
Yes, Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN), Facebook (NASDAQ:FB), and Alphabet (Google) (NASDAQ:GOOGL) did well last year.
He believes oil will rise above $70 a barrel, a rise of 43%, due to rising demand for gasoline for commuting workers and jet fuel for airlines. The oil stocks would benefit from a 43% rise to $70 which is a good price level for them.
Goldman Sachs Market Predictions
Goldman Sachs 2021 Predictions are for new highs for the major indexes. That forecast is based on the idea that corona virus vaccinations will be fully available by mid-2021. That should allow businesses to reopen and hire employees again.
Goldman Sachs projects U.S. economy will grow 5.3% in 2021, far above the Federal Reserve’s 4% prediction. And they see unemployment falling to 5.3%. Unemployment is receding right now, with jobless claims 48,000 fewer than expected last week.
Forbes analyst Jonathan Ponciano said in a recent report that Goldman Sachs expects the S&P to end next year at about 4,300 points (indicating 17% upside). He said that Goldman Sachs estimates that 50% of the U.S. population will be vaccinated by April.
JP Morgan Stock Market Forecast
24 stock market analysts reported to JPMorganChase and as the graphic depicts, their median forecast was for a 2.2% rise in sotck prices in 2021.
The believe the S&P 500 will reach 4,000 by early next year. Their base case S&P 500 price target for 2021 is 4,400, with a range of 4,200 to 4,600.
As many other optimistic analysts believe, the top gainers will be the reopening stocks or those who were devastated by the pandemic shutdown. the 6 sectors they believe will excel in 2021 are: Consumer discretionary, energy, financials, healthcare, technology and semiconductors, and Bond proxies.
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