Last week, Goldman Sachs raised its year-end price target for the S&P 500, but we pointed out that predicting the S&P hasn't been one of Goldman's strengths recently. In this week's Bloomberg survey of major sell-side strategists, two more firms (Credit Suisse and HSBC) upped their year-end price targets as well. This moved the overall average up to 1,022, which is a gain of 4.05% from current levels.
Just like Goldman, prognosticating has been difficult for Credit Suisse and HSBC this year. At the start of the year, Credit Suisse estimated that the S&P 500 would end the year at 1,050 (or a gain of 16.25%). On March 2nd, a week before the 666 low, Credit Suisse caved and lowered its price target to 920. Now that the S&P 500 has roared back, Credit Suisse has raised its year-end target back to its start-of-the-year level of 1,050. HSBC's call is probably a bit worse because they lowered their target on March 23rd from 1,000 to 900 well after the market bottomed on March 9th. Now that the S&P has gotten close to HSBC's original prediction at the start of the year, today they upped the 900 call to 1,020.
Maybe all these firms that lowered their targets near the market lows are hoping we'll all forget about them. Wouldn't it be ironic if the market finally decides to head lower again now that they're all re-upping their targets after a 40% rally? Regardless, we feel that predicting the S&P 500 a year out in this market is futile at best and dangerous at worst.
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Hear Hear!
Posted by: Nice | July 27, 2009 at 06:13 PM
last time firms downgraded forecast in the bottom, maybe now we are on the highs? :-)
Posted by: Artem | July 27, 2009 at 06:14 PM