Podcast
Questions and Answers
What factor is expected to drive S&P 500 gains into 2025 according to Wall Street analysts?
What factor is expected to drive S&P 500 gains into 2025 according to Wall Street analysts?
President-elect Donald Trump's pro-growth policies.
How much did the S&P 500 rise in market value this year, contributing to its strong performance?
How much did the S&P 500 rise in market value this year, contributing to its strong performance?
Around $5.8 trillion.
What is the forecasted earnings rise for the S&P 500 in the final quarter of the year?
What is the forecasted earnings rise for the S&P 500 in the final quarter of the year?
9.8%.
What is Sam Stovall's end-of-year 2025 price target for the S&P 500?
What is Sam Stovall's end-of-year 2025 price target for the S&P 500?
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What investment trends were reported by Bank of America's Flow Show regarding U.S. stock funds?
What investment trends were reported by Bank of America's Flow Show regarding U.S. stock funds?
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What current valuation is the S&P 500 trading at, and how does it compare to its five-year average?
What current valuation is the S&P 500 trading at, and how does it compare to its five-year average?
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What historical trend has been noted regarding market volatility in the first year of presidential terms since 1949?
What historical trend has been noted regarding market volatility in the first year of presidential terms since 1949?
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What does the CBOE Group's VIX index represent, and what is its current level?
What does the CBOE Group's VIX index represent, and what is its current level?
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How much did the VIX decrease after President-elect Trump's victory, and what was the market response?
How much did the VIX decrease after President-elect Trump's victory, and what was the market response?
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What projected daily price swings does the current VIX suggest for the S&P 500 over the next 30 days?
What projected daily price swings does the current VIX suggest for the S&P 500 over the next 30 days?
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Study Notes
S&P 500 Outlook
- S&P 500 projected to extend bull run into 2025, but heightened volatility expected due to the Trump administration's policies.
- S&P 500 has risen over 25% this year, increasing market value by $5.8 trillion. This surge is partly due to tech stock gains and Fed's interest rate cuts.
- Corporate earnings for the S&P 500's third quarter increased by 8.8% to $527.4 billion; projected to increase another 9.8% in the final quarter.
- Analysts forecast a 14.1% increase in S&P 500 earnings next year, reaching $275 per share, potentially driven by corporate tax cuts and relaxed regulations.
- US economy forecast to grow by 2.5% next year, bolstered by a strong labor market and resilient consumer spending.
- Global investors are heavily invested in U.S. assets, evident in the record influx of $55.8 billion into U.S. stock funds last week—the highest since March.
Analyst Projections
- CFRA's Sam Stovall raised S&P 500's end-of-year 2025 target to 6,585 points, anticipating an 11% increase and $5 trillion in added market value.
- Stovall's projection factors in 2.4% projected real GDP growth and 13% growth in S&P 500 operating earnings.
- However, the current valuation of the S&P 500 (22.6 times 12-month earnings) is above its five-year average (20.7).
- The S&P 500 has seen double-digit gains in the past two years and a 66% increase since the 2022 bull market began.
- Projected increased volatility (VIX) is expected due to the upcoming presidential inauguration. Historical data show nearly 90% of presidential first-year terms since 1949 experienced declines exceeding 5%, averaging a 17.5% decrease.
- Current VIX (fear gauge) level of 17.09 suggests daily price swings of around 1.07% or 63 points for the S&P 500 over the next 30 days.
Investor Sentiment
- Post-election, investor fears subsided as the VIX decreased by over 20% as investors rushed back to stocks following President-elect Trump's decisive victory.
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Description
Explore the projections for the S&P 500 as it is expected to extend its bull run into 2025 despite anticipated volatility. This quiz covers recent market surges, corporate earnings growth, and economic forecasts that underpin investor confidence and market dynamics.
