December 18, 2017
Assistant professor in the Department of Economics at Texas Tech University.
What do you expect from the stock market in 2018? At what level will the S&P 500 finish the year?
The Bullish stock market is likely to continue, but at a slower pace. The S&P 500 is likely to hit the 3000-point mark, which constitutes a growth of more than 10 percent from its current level. It should be noted, however, that the returns from S&P are far from being stable; for example, the average return was above 32 percent in 2013, but dropped to roughly 14 percent in 2014 and 1.3 percent in 2015. It then jumped to nearly 12 percent in 2016. In addition, the likely rise in growth of GDP does not necessarily indicate faster growth in stock returns. To this end, the S&P index performed considerably better in 2016 than in 2015, even thought the growth rate of GDP in 2016 was roughly half of the GDP growth rate of 2015 (1.5 percent vs. 2.9 percent, respectively).