In 2024, the stock market has been performing strongly, with the S&P 500 rising by nearly 21 percent over the first three quarters of the year. However, analysts surveyed in Bankrate’s Third-Quarter Market Mavens Survey expect more modest returns in the coming 12 months. They predict the market to rise by just 4.1 percent over the next four quarters, below its long-term annual average of 10 percent. The analysts see the S&P 500 climbing from 5,738 at the end of the survey period to 5,975 by the end of the third quarter of 2025. They prefer U.S. stocks over international ones and believe that value stocks will outperform growth stocks over a similar time frame.
Despite the optimism for the next year, analysts remain cautious about the stock market’s performance over the next five years. Forty-two percent of respondents expect returns over the next five years to be lower than the historical average of around 10 percent per year. Thirty-three percent think returns will be about the same, while 25 percent anticipate returns above the historical average. Some analysts attribute the expected lower future returns to the already high valuations in the market, stating that returns may equal earnings growth and be lower than historical returns.
U.S. stocks continue to be favored over international stocks by the majority of analysts in the survey. Seventy-five percent of respondents believe that U.S. stocks will outperform global stocks over the next year. They cite the robust U.S. market based on earnings outlook, wage moderation, and lower rates as reasons for their preference. However, some analysts point to higher U.S. valuations and favorable monetary policy abroad as factors that favor global stocks. While the preference for U.S. stocks has been consistent, it was slightly down from the previous quarter.
In a shift from previous quarters, analysts in the survey now prefer value stocks over growth stocks for the next four quarters. Forty-two percent of respondents believe that value stocks will outperform growth stocks, while only 17 percent think the opposite. Some experts point to historical performance and the start of a rate-cutting cycle as reasons for preferring value stocks. Despite the preference for value stocks, some analysts predict that the gap in performance between growth and value will narrow over the next year.
The survey was conducted in September 2024 and included responses from a variety of stock market professionals. The experts offered insights and analysis on the future performance of the stock market, emphasizing the importance of conducting independent research before making investment decisions. Overall, while the market has shown resilience in the face of uncertainties, analysts remain cautious about the outlook for the next 12 months and the next five years.
