Stock Market Predictions for 2019: Analysts Forecasts for Recession and Crash in the New Year

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As we near the end of eventful 2018, anxieties regarding 2019 are building up. Stock market predictions for 2019 are coming from all sides. But in this article we will mention some of the most viable stock market forecasts for 2019.

Credit Suisse’s Bullish Outlook for 2019

Unlike a lot of market gurus, Credit Suisse has a bullish stock market prediction for 2019. In September, Credit Suisse’s chief U.S. equity strategist Jonathan Golub said that he expects S&P 500 Index to end 2019 at 3,350 points. This level implies a whopping 11.7% jump from the ending level predicted by the analyst for 2018. Golub said that despite the market uncertainty resulting from yield curve inversion, “disruptive” midterm elections, and continued Fed tightening, he expects a solid economic/earnings per share growth and “benign” recessionary risks. The analyst thinks that stronger market fundamentals will propel the stock higher in the coming year.

Golub said that there is no risk of a recession in the near future. He especially likes stocks from the internet retailer and communication services industry because he believes that companies from these sectors have above-average revenue and earnings prospects.

Recession Chances in 2019

But not all analysts are bullish for 2019. Brad McMillan, chief investment officer at Commonwealth Financial Network, is expecting a recession in 2019. The analyst expects S&P 500 to conclude 2018 at 3,000. The analyst thinks that a few back-to-back quarters of negative GDP growth could result in a bear market in stocks. McMillan, who manages 150 billion Commonwealth Financial Network, thinks that the biggest negative factor for the markets in 2019 is the rising interest rates, which are proving disastrous for corporate debt.

Morgan Stanley’s Bearish Outlook for 2019

Morgan Stanley is also not hopeful regarding the stock market in 2019. The firm’s equity strategist Mike Wilson said in a report in November that he sees “stagnant” performance in 2019. Wilson is the analyst who became famous because of predictions regarding the U.S. stock market after a massive sell-off took place over the last few months.

Wilson thinks that S&P 500 will finish 2019 at around 2,750, just 3% above current levels.

Mr. Wilson thinks that factors like decelerating top-line and building cost pressures in 2019 will drag earnings below consensus expectations. The analyst also said that we could also expect “outright earnings recession” in the year. One of the reasons behind Wilson’s bleak outlook for 2019 is the expected decelerating gross domestic product growth as effects of President Donald Trump’s tax cuts wear off. Above all, the analyst expects interest rates hikes to continue in 2019.

Barclays analyst Maneesh Deshpande said in November that 2019 will be a bad year for investors as U.S. government’s spending will slow down and the benefits of tax cuts announced by the Trump.

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Author does not have investment in stock discussed in this article.

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