BYE-BYE, BEAR

A new bull market became official in June. But it looks a little wobbly.

- ANNE KATES SMITH

A summer rally has closed the books on the bear market of 2022, but plenty of market experts remain skeptical about the new bull market. It became official in early June, when the S&P 500 index closed 20% above its October 2022 bottom, the traditional indication that a new round of market gains is under way. The blue-chip barometer closed at 4450 on June 30.

As stocks have continued to grind higher this year, a number of Wall Street analysts have become bullmarket converts, boosting their year-end forecasts for stock prices overall. “Admittedly, we entered the year more cautious given the host of uncertainties the market faced, but it seems that all the doom and gloom that many others were prognosticating has yet to come to fruition,” says strategist Brian Belski, at BMO Capital. He now sees the S&P 500 at the 4550 level by year-end, up from a prior forecast of 4300. Strategists at Goldman Sachs boosted their year-end S&P 500 target to 4500, from 4000. Sam Stovall, chief investment strategist at investment-research firm CFRA, reiterated the firm's original yearend forecast of 4575 for the index but reset the firm's 12-month target to 4820, implying an 8% gain by June 2024.

If history is a guide, says Stovall, the prognosis for further gains from here is good. Since World War II, whenever the S&P 500 closed 20% above its prior bear-market low, the index gained an average 11.3% over the subsequent five months before stumbling into a correction of 10%, on average. Even with a correction, 12 months after crossing the new-bull-market threshold, the S&P 500 was higher by nearly 20%, says Stovall, rising in 12 of 13 instances.