Stocks have been experiencing some volatility recently, but Piper Sandler sees significant gains on the horizon. Craig Johnson, the chief market technician at the firm, predicts that the S & P 500 could reach 6,600 by 2025, which is 12.8% higher than its closing level on Tuesday. Johnson believes that despite various challenges and uncertainties, the market has been steadily climbing upwards for the past two years. He wrote in a note, “The old Wall Street adage ‘Bull Markets Climb a Wall of Worry’ sums up the narrative of this market well.” He also mentioned that factors such as a shift in Fed policy, normalization of the yield curve, and changes in market leadership indicate that the bull market is likely to continue and expand in the coming year.
Looking back at 2024, there was a remarkable rally in the market, with the S & P 500 surging by 22.7%. Johnson expects sectors like financials, technology, and industrials to lead the index higher in the next year. He also anticipates that small-cap stocks will outperform large-cap names. Despite facing challenges like rising Treasury yields and the upcoming U.S. presidential election, Johnson believes that once these hurdles are overcome, the bull market will persist.
In other news on Wall Street, Baird downgraded McDonald’s from market outperform to market perform due to a recent E. coli outbreak at the fast food chain. Analyst David Tarantino expressed confidence that McDonald’s would be able to manage the issue effectively but highlighted concerns about the near-term demand outlook in the U.S. and the challenging economic environment outside the country.