Where is the SPX most likely headed in the coming years
Updated
Although it's hard to predict what the stock market will do in the future, there is already a clear consensus on what is likely to happen.
In this chart, I have plotted most predictions from big investment banks like Goldman Sachs and Morgan Stanley to other investors like Michael Burry. I have also calculated the average of all the predictions and plotted it on the chart.
I think the most likely scenario is that we retest the lows of the Corona Virus Crisis, and then we trade sideways from there (illustrated with the red arrows). There is also the probability that we bounce off the 3000 SPX as the consensus estimates and then trade sideways from there (illustrated with blue arrows).
The main reason we might trade sideways for the coming years is because of a dilemma the Federal Reserve is currently facing. Having to fight a battle between high inflation caused by quantitative easing done during the Coronavirus Crisis, and fighting said inflation by raising interest rates which will make it harder to maintain its 30 Trillion dollars of debt obligations. Likely changing back and forth till there is a deleveraging of the whole system that will last at least 3 years. And since the markets are strongly correlated to what the fed does, this will be the most likely outcome.
Let me know your predictions and see if you agree more with the blue arrows or red arrows.
In this chart, I have plotted most predictions from big investment banks like Goldman Sachs and Morgan Stanley to other investors like Michael Burry. I have also calculated the average of all the predictions and plotted it on the chart.
I think the most likely scenario is that we retest the lows of the Corona Virus Crisis, and then we trade sideways from there (illustrated with the red arrows). There is also the probability that we bounce off the 3000 SPX as the consensus estimates and then trade sideways from there (illustrated with blue arrows).
The main reason we might trade sideways for the coming years is because of a dilemma the Federal Reserve is currently facing. Having to fight a battle between high inflation caused by quantitative easing done during the Coronavirus Crisis, and fighting said inflation by raising interest rates which will make it harder to maintain its 30 Trillion dollars of debt obligations. Likely changing back and forth till there is a deleveraging of the whole system that will last at least 3 years. And since the markets are strongly correlated to what the fed does, this will be the most likely outcome.
Let me know your predictions and see if you agree more with the blue arrows or red arrows.
Note
This ended up moving faster to the upside base on AI and other factors that made a huge rally across the S&P 500
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