Citigroup Raises S&P 500 Forecast, but Still Predicts Decline

Citigroup's (NYSE: C) view on the prospects for the S&P 500 index has become much rosier. A team of analysts from the big bank, led by its chief U.S. equity strategist, Tobias Levkovich, upped its year-end forecast for the benchmark stock index by nearly 14% in a research note disseminated to the media on Tuesday.

Still, the prognosticators believe the index's level will go down for 2020 rather than up. Although they now predict it will end the year at 3,300 (up from their previous estimate of 2,900), that figure is down from the index's most recent close of almost 3,444.

Sunset over the sea.

Image source: Getty Images.

The upward adjustment to the forecast is due to a set of factors that Levkovich and his team believe will be decisive. They think that "unbridled" help from a Federal Reserve determined to support the country's capital markets will provide a major, got-your-back impetus. In fact, it's their opinion that the Fed will do whatever it takes to keep a market crash at bay.

Still, since the Citigroup forecasters remain essentially bearish on the S&P index's prospects, they sounded a cautious note (or several) in their most recent analysis. While recommending that investors continue to take some risk, they also advise "defensiveness" in relation to the equities market.

"For some reason, we keep getting visions of Icarus getting too close to the sun and thus while we have lifted objectives to reflect these realities and the potential for even more upside, we think that ignoring some of our other indicators is not sound," the Citigroup team wrote in its note.

10 stocks we like better than Citigroup
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Citigroup wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks


*Stock Advisor returns as of August 1, 2020


Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story


Latest Markets Videos

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More