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

FAQs

Can the S&P 500 hit 6500? ›

Economists at the research firm predicted the S&P 500 would soar to 6,500 by the end of 2025, implying a 26% increase from its current levels. That's contrary to what more bearish commentators have said, with some market gurus warning of an imminent stock correction as the S&P 500 mirrors other historic bubbles.

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.

Analysts expect overall S&P 500 earnings to rise 9.5% in 2024 after increasing around 4% in 2023, LSEG data showed. But valuations have risen along with stock prices.

Ed Yardeni, the renowned economist and market expert, has made a bold prediction for the future of the stock market. He believes that the S&P 500 could surge by a whopping 26% by 2026 to 6,500.

Stock Market Average Yearly Return for the Last 30 Years

The average yearly return of the S&P 500 is 10.22% over the last 30 years, as of the end of February 2024. This assumes dividends are reinvested. Adjusted for inflation, the 30-year average stock market return (including dividends) is 7.5%.

Looking at the S&P 500 for the years 1993 to mid-2023, the average stock market return for the last 30 years is 9.90% (7.22% when adjusted for inflation). Some of this success can be attributed to the dot-com boom in the late 1990s (before the bust), which resulted in high return rates for five consecutive years.

We predict the S&P 500 will increase around 60-80% from its current levels by 2030. However, there is always the chance that unforeseen events could affect these numbers.

Should I pull my money out of the stock market? ›

Key Takeaways. While holding or moving to cash might feel good mentally and help avoid short-term stock market volatility, it is unlikely to be wise over the long term. Once you cash out a stock that's dropped in price, you move from a paper loss to an actual loss.

Here's the Growth Stock to Buy Right Now. The Nasdaq-100 technology index plunged into a bear market in 2022 on the back of a 33% loss for the year.

Optimistic: 6%-7% per year.

If you assume margins and P/E multiples will remain at their current high level, and expect sales and buybacks to grow at their historical rates, then you can anticipate making about 6% in returns per year over the next decade.

Basic Info. S&P 500 10 Year Return is at 180.6%, compared to 174.1% last month and 161.9% last year. This is higher than the long term average of 114.4%.

Basic Info. S&P 500 5 Year Return is at 85.38%, compared to 83.02% last month and 55.60% last year. This is higher than the long term average of 45.20%. 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 stock market return is about 10% per year for nearly the last century, as measured by the S&P 500 index. In some years, the market returns more than that, and in other years it returns less.