Wall Street’s rally is likely run out of fuel as investors fret about the November presidential election, with the major indexes ending 2020 below current record highs, according to the poll, conducted over the past two weeks.
The S&P 500 will end 2020 at 3,300 points, down over 4% from current levels, according to the median forecast of about 55 market strategists and fund managers.
That would leave the closely watched benchmark with an annual 2% gain in a year that saw the coronavirus cripple the global economy and leave tens of millions of Americans out of work.
While strategists are generally unsuccessful at predicting stock market performance, their forecasts provide a valuable snapshot of expectations across Wall Street.
“The market is not pricing in the potential for a Democrat sweep in November, which would create massive headwinds for the economy and the markets,” said Synovus Trust portfolio manager Daniel Morgan.
For weeks ahead of the 2016 election, strategists warned that instability caused by a potential Donald Trump victory would hurt Wall Street, only to see markets rally after he won.
With President Trump repeatedly claiming, without evidence, that plans to allow mail-in ballots would lead to a surge in electoral fraud, some investment strategists warn that uncertainty about the integrity of the vote and its outcome could roil financial markets.