'Bubble may be far from bursting': Capital Economics says S&P 500 could hit 6,500 by end of next year (2024)

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'Bubble may be far from bursting': Capital Economics says S&P 500 could hit 6,500 by end of next year? ›

But one could come as soon as the end of next year, he suggested, as that would lengthen the pandemic bull market to about 5 years, the lifespan of the dot-com bubble. He predicted the S&P 500 could notch 6,500 by the end of 2025. That implies another 22% run-up in stocks before the bubble begins to deflate.

Capital Economics chief market economist John Higgins predicts the S&P 500 can hit 6,500 by the end of 2025. This outlook is more dependent on the current AI-fueled bubble growing. For now, he maintains the bubble-like trade in the market can bring the benchmark average to 6,500 by the end of 2025.

That suggests the S&P 500 could trade to 6,000 by August 2025, and to as high as 6,150 by November 2025. But in the short-term, amid the ongoing weakness in stocks, Suttmeier said investors should keep an eye on potential support levels for the S&P 500 at 5,000 as well as a range from 4,600 to 4,800.

Analysts expect overall S&P 500 earnings to rise 10.4% in 2024, LSEG data showed. But stocks are also at high valuation levels. The S&P 500 trades at a forward price-to-earnings ratio - a commonly used metric to value stocks - of 20.9, well above the index's historic average of 15.7, according to LSEG Datastream.

In terms of a price target, Bank of America is targeting S&P 500 5,150 to 8,700 with its S&P 500 price forecast for 2030.

If the S&P 500 does compound 9.2% annually over the next 10 years, it will reach 10,000 by 2033, Colas wrote Friday.

Yes, you may be able to beat the market, but with investment fees, taxes, and human emotion working against you, you're more likely to do so through luck than skill. If you can merely match the S&P 500, minus a small fee, you'll be doing better than most investors.

S&P 500 Forecast 2026-2030

These five years would bring an increase: S&P 500 value would move from 6,284 to 8,580, which is up 37%. S&P 500 will start 2026 at 6,284, then soar to 6,376 within the first six months of the year and finish 2026 at 6,808. That means +37% from today.

While there could be a growth slowdown in the first half of 2024, experts believe growth should resume in the second half of the year. Americans faced many financial challenges this year, from persistent inflation to increasingly expensive debt.

According to his math, since 1949 S&P 500 investments have doubled ten times, or an average of about seven years each time.

What is the expected return of the stock market in the next 10 years? ›

Highlights: 5.2% 10-year expected nominal return for U.S. large-cap equities; 9.9% for European equities; 9.1% for emerging-markets equities; 5.0% for U.S. aggregate bonds (as of September 2023). All return assumptions are nominal (non-inflation-adjusted).

With stock indexes at all-time highs, it seems we are in the midst of a new bull market. While much of the market's recent gains have come from a handful of stocks, the rally has begun to broaden in recent months. Expectations of an earnings rebound in 2024 suggest earnings could continue to drive the market higher.

Moreover, the S&P 500 is slightly below its high right now, so the chart suggests investors that put money into an S&P 500 index fund today could see an annualized return of 11.3% over the next three years.

The historical average yearly return of the S&P 500 is 12.58% over the last 10 years, as of the end of April 2024. This assumes dividends are reinvested. Adjusted for inflation, the 10-year average stock market return (including dividends) is 9.52%.

S&P 500 5 Year Return is at 70.94%, compared to 85.38% last month and 57.45% last year. This is higher than the long term average of 45.28%. The S&P 500 5 Year Return is the investment return received for a 5 year period, excluding dividends, when holding the S&P 500 index.

The estimates from strategists put the median target for the S&P 500 at 5,200 by the end of 2024, implying a decline of less than 1% from Friday's level, according to MarketWatch calculations. Heading into 2024, the median target was around 5,000 (see table below).

The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31^st 2023, had an annual compounded rate of return of 15.2%, including reinvestment of dividends.

The average yearly return of the S&P 500 is 10.47% over the last 30 years, as of the end of April 2024. This assumes dividends are reinvested. Adjusted for inflation, the 30-year average stock market return (including dividends) is 7.74%.