Capital Market – Are Analysts Bearish Or Bullish For 2017? (Rank Princess – SEO)

The bull market for stocks, which began in March 2009, should persist for at least another year. That is the belief of most financial market professionals involved in the latest surveys.

Here are some other opinions and predictions:

  • Growth stocks will be favored by value actions.
  • It is believed that international and US stocks have fairly similar prospects in the next 12 months.
  • Many believe that the Federal Reserve will elevate interest rates in June, while a smaller number believe the central bank will linger till a later time.
  • The yield on the 10-year Treasury bond is lower than expected, at just over 2%.
  • There are high concerns about another drop in the market.

The Details

Positive but Modest Returns

As the year 2016 began, the stock market was on a downward slide. But key averages have stabilized since then and have moved higher. On an average, there is a 12-month forecast for the Standard & Poor’s 500 Index (S & P 500), in 2049. The median, or half, is higher at 2125, which translates into a gain of 4% from the period in which the survey was conducted.

Sam Stovall, a US strategist at S & P Global Market Intelligence, says: “The continued erosion of the 2016 (earnings per share) projections, in addition to rising inflation, represent potential barriers to action.”

Keep Your Belt Attached

Even if the path to stocks is on higher ground, experts suggest that there could be more volatility ahead. Almost half of them, or 46%, said that they had not seen this year’s low for the S & P 500. Of these, a 12% to 31% drop was predicted. The benchmark index was set at 2040 when the survey was completed. However, it must be kept in mind that 54% of panelists say that the S & P downturn for the year has already been seen.

Bear Market Ahead?

The average came down from 44% to 40% when inquired about the chances of a bear market in stocks for the coming year or so. That is a 4% decrease from when the question was asked in the first quarter of 2016.

“I think the odds are not conducive to a bear market, but weakness in corporate profits is one of the main reasons,” says Chuck Carlson, CEO of Horizon Investment Services.

The president of Envision Capital Management in Los Angeles, Marilyn Cohen, believes stocks are moving in a bear market. “There is hardly any first-rate revenue growth. Businesses cannot grow if all they do is take the excess cash, borrow in the bond market and repurchase shares,” says Cohen.

The World Is Flat

There is a big change from the previous quarterly survey when experts thought that the outlook was the best for the US market. Now, 39% think the United States is the place to be, while39% prefer international stocks over the next year.

Michael K. Farr, president of Farr, Miller and Washington, says: “While we are of the belief that the rate of economic development will be reticent in the United States, we believe it builds up well against most other countries.”

The remaining 22% say that the returns will be approximately the same over the next year.

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Capital Market: Are Analysts Bearish or Bullish For 2017? (Rank Princess – SEO)

The year 2016 saw S&P 500 boosted with annual returns in double digits, since then all of Wall Street experts are sliding towards the animal spirit of the bear for the year 2017 more than they have been since the year 2005.

Bespoke Investment Group is one of the popular investment firms since their launch in 2007. They have predicted a good five percent in gain for this year, which is double since 2005.

Predictions for 2017

This bearishness of the market has investors feeling great about their prospects this year.DubravkoLakos-Bujas of JPMorgan lends his two cents and anticipates S&P 500 predictions 2017 to rise about 2,400 (2-3%) by the end of this year. He said that under the Trump administration, with the tax reform, deregulation and fiscal spending the market is rising higher. However, USD and rising yields are the hurdles for an expanding equity and profitability.

The bullish loyalists are, however, brilliantly positive that Trump’s economic policies, especially with the tax cuts, are going to increase the profits from stocks yielding higher returns.

Another reputed analyst Jonathan Golub of the RBC is confident of a 10% in S&P 500 gains this year. He predicts that the multiples will escalate quicker than the earnings this term. He warns though that analysts must wait till Trump policies offer clarity before they estimate.

Market scenario often ends the way they start comments Bespoke. A bullish market will end rather bullish and not bearish as conceived famously. The firm remembers the 2008 S&P 500 plunge due to the housing mayhem.

An all-time favorite, Goldman Sachs 2017 forecast is affirmative that the market will lean towards being bearish and does not think that the Trump led administration will deliver and that S&P 500 will steer towards 2400 this year. They are focused on the constraints in the recent budget that directly affects the fiscal spending rather than just relying on the tax cuts.

What 2017 Has in Store?

Analysts not only use numbers but also relate the history of the market trends before revealing predictions. Many investment firms agree that investors should be cautious this year as this market is not looking like the best of all time. They are apprehensive about this bull market and advice clarity before investing.

Bespoke analyzed the last eight years of the bull market that had given glorious gains during all of that period before they released their current technical analysis of the S&P 500, and are hopeful that this year will follow suit.

Final Word

Doug Ramsey, CIO of the Leuthold Group, began this year feeling the market to be bearish when the US stocks took a plunge of more than 20 percent. Since he witnessed the strong rebound bringing returns, he seems optimistic about this bull market.

This year’s market has been especially challenging with the fluctuating economic reforms around the world and local instabilities and the lack of clarity. This bullish scenario has been hugely underestimated which is evident following last week’s gains. For now, the investors are happy and are confident for the future.

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