Good morning investors. The stock market took a beating to start the week, pulling back from record highs.

But that didn’t stop the equity research firm Oppenheimer from publishing the splashiest market call on the Street (so far).

Wall Street expects ‘25 to be weaker than ‘24

Wall Street forecasters make a lot of money to predict what the stock market’s going to do next. 

Mostly, though, teams inside research firms and banks tend to cluster their year-end S&P 500 estimates around the historical average of about 10%. 

After all, in finance as in consulting, playing it safe rarely gets you fired. 

Among the 16 firms tracked by Opening Bell Daily, Oppenheimer leads the way with the most optimistic call for the benchmark stock index.

Led by chief investment strategist John Stoltzfus, the team holds a year-end forecast of 7,100, which represents a 17.3% gain from Monday’s closing price. 

Economic resilience and market momentum, Stoltzfus wrote in a note to clients, should carry into the new year. 

Indeed, it’s not nothing that the S&P 500 has notched 57 all-time closing highs this year.

That’s only happened a handful of times in the last century.

“[T]he current bull market likely has legs strong enough to climb the proverbial ‘wall of worry’ into and through 2025,” Stoltzfus said, noting that market breadth continues to broaden across sectors. 

Meanwhile UBS, the most bearish of the bunch, sees stocks climbing a mere 5.74% from current levels.

Goldman Sachs and Morgan Stanley both anticipate a 7.39% rally from here, and DataTrek Research sees a 13% gain ahead.

As Opening Bell Daily has covered, the most common annual return for the S&P 500 is between 10-20%. 

With the index holding a 27% gain in 2024, that puts it spitting distance from rarefied air. Dating back to 1874, the S&P 500 has only rallied 30% or more in a single year 7% of the time.

It’s no wonder optimism and animal spirits have defined markets over recent months. 

While UBS has published a relatively muted 2025 SP 500 outlook, Jason Draho, the firm’s head of asset allocation and CIO for the Americas, nonetheless sees minimal downside in the short-term for investors. 

“With risks either not materializing or investors not paying much attention to them as the holidays approach, the path of least resistance is for the markets to keep rallying,” Draho said.

“In-line inflation data this week and the Fed cutting 25 [basis points] next week don’t guarantee this as these outcomes should be largely priced in. But absent negative news flow, upward momentum tends to be self-reinforcing, supported by investors chasing the rally.”

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Elsewhere:

📉Nvidia stock tumbled 2.5% after regulators in China announced they were investigating the company for potential violations of anti-monopoly laws. The US has blocked Nvidia and other chipmakers from selling their most advanced tech to China in a bid to limit the country from strengthening its military. (CNBC)

🍎 Apple is eyeing $4 trillion. The stock gained 1.6% on Monday and the company’s market cap hit an all-time high at $3.73 trillion. Like the S&P 500, the iPhone-maker has returned 27% this year, though analyst recommendations remain mixed. (Yahoo Finance)

🚨The Buffett Indicator is flashing a warning. This measures the total market cap of US stocks relative to GDP. It hit a record-high of about 209% on Monday, surpassing 2021 levels. However, strategists at Morgan Stanley argued that the indicator has become increasingly flawed, as it fails to capture foreign sales, which don’t impact GDP. (Business Insider)

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