SP 500 and yearly targets

Posted: October 4, 2016 in Uncategorized

Last year the SP500 climbed 12.9% (1,920 to 2,168), where do the US analyst see it next year?

The aggregate analyst average says 9.8% (2,381) as of 30 September with the best sector being Healthcare, IT and the lowest being Industrial and Utilities.

How close to the target have they being in the past? Last year they missed by a lot (+9.4%!) and on average by +1.5%.

How do I see it? In reality is too early to call it, specially with an election looming.

But yes, technically speaking could aim to 2,400 as per technical analysis – but it could easily and retreat to 2,300 (+6%).

As per sectors a lot depends by the election. Clinton would be an issue for Healthcare and Trump would be a bonus for Industrials.

Utilities go together with US interest rates hikes (in reverse) – as shown more and more a steep rate hike trajectory from the Fed is quite a fantasy – I believe is a mere jawbowning – so I would not discount they surprise to the upside.

This, logically, is excluding some major black swan event happening.

While Italy, Germany and France could bring jitters (specially France) next year the thing to watch, specially if Clinton wins, is the US/Russia relationship.

But if that relationship goes really bad, the market crash will be the least of your worries.

Data courtesy of Factset

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