According to a Reuters poll of strategists, the stock market is poised to rise between now and the end of 2021 as the anticipated widespread release of COVID-19 vaccines drive an economic and corporate earnings recovery from the pandemic.
The benchmark S&P 500 will finish 2021 at 3,900, a 9% gain from its close Monday of 3,577.59, according to the median forecast of 40 strategists polled by Reuters over the last two weeks.
Recent evidence of high efficacy rates in experimental COVID-19 vaccines has driven an advance in equities this month, and strategists in the poll cited progress in the vaccine as the main factor behind their forecasts. “They assume a vaccine is widely available starting some time in the second half of 2021,” said Sameer Samana, senior global market strategist for Wells Fargo Investment Institute, which has a 2021 year-end forecast for the S&P 500 of 3,900.
With a big pickup in the economy expected to follow, Wall Street is likely “grossly underestimating” next year’s rebound in earnings, said Jim Paulsen, chief investment strategist at The Leuthold Group in Minneapolis, who sees the S&P 500 ending next year at 4,100. “That’s one thing I think could be a huge driving force,” for stocks, he said.
Based on the poll, the Dow Jones industrial average, which was near 30,000 through Monday, will finish next year at 32,500, up around 10% from Monday’s close… The S&P 500 technology sector, which includes Apple Inc. and Microsoft Corp., is up roughly 30% for the year so far and leading gains among sectors, followed by the consumer discretionary sector, which includes Amazon.
MacDailyNews Take: Again, we’re very hopeful that the various COVID vaccines will arrive on a widespread basis even more quickly than many thought possible earlier this year as the U.S.’s Operation Warp Speed accelerates the development and, importantly, the manufacture of millions of doses by funding steps to proceed simultaneously versus the usual, significantly slower sequential process.