Wall Street Comes to Grips With How Wrong It’s Been in 2023
Stock-market strategists who were largely wrong about this year’s rally are finally starting to come to face their mistake, raising year-end targets for the S&P 500 Index.
Take Societe Generale’s Manish Kabra, who boosted his year-end target last week on the index to 4,750 from 4,300 — 25% above his original call of 3,800 heading into 2023. Or Piper Sandler & Co.’s Michael Kantrowitz and BNP Paribas SA’s Greg Boutle, who at 3,225 and 3,400 had held the lowest targets among sell-side forecasters. They were cornered into lifting their 2023 outlooks in recent months just to keep up with this year’s 15.9% rally.
And then there’s Morgan Stanley’s Mike Wilson, a stalwart bear, who conceded in July that he was pessimistic for too long. Though he still sees US stocks falling more than 10% before the year is out.
“Group think and psychology is a primary driver of strategists’ behavior,” Adam Sarhan, founder of 50 Park Investments, said. “So many strategists have been wrong for so long this year, so many have been forced to adjust their targets as they try to catch up with the stock market.”