Where Will The S&P 500 Finish In 2014?

Posted: Jan 2 2014, 3:21pm CST | by , in News


Where Will The S&P 500 Finish In 2014?
Photo Credit: Forbes

2013 was a banner year for investors, as the market hit record highs. Both the Dow and S&P 500 finished the year with their largest gains in over a decade, with the latter up an amazing 30%. But what are we in store for in the new year?

In their latest report, FactSet aggregated 2014 predictions from analysts, and no one expects the huge gains we saw in 2013. But the results were still contradictory. Industry analysts predicted an average S&P 500 increase of 4.8%. Market strategists, on the other hand, predicted a 2.3% decrease for the S&P.

Which group will be right? Perhaps the correct answer is somewhere in between. FactSet notes that history suggests that industry analysts are generally too bullish, and market strategists are too bearish. Over the past three years (on a monthly basis), industry analysts overestimated the S&P closing price 12 months later by 2.6%, while market strategists underestimated by exactly the same amount.

When you look at individual components of the S&P, the positive sentiment among industry analysts becomes even more overwhelming. 50% of companies are listed with Buy ratings, 45% had Hold ratings, and only 5% were marked Sell. That was slightly more negative than the third quarter results, though. FactSet recorded a decrease in Buy ratings of 1.5%, and a Hold ratings decrease of 5.5%.

In terms of specific sectors, Energy saw the most optimism among analysts, with 59% Buy ratings. Materials and Telecom Services were the most pessimistic., with 9% Sell ratings.

Follow Brian Solomon on Facebook and Twitter.

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Source: Forbes

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Forbes is among the most trusted resources for the world's business and investment leaders, providing them the uncompromising commentary, concise analysis, relevant tools and real-time reporting they need to succeed at work, profit from investing and have fun with the rewards of winning.




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