Panmure Liberum forecasts the S&P 500 will retreat to 5,000 points by the end of 2027, a drop of more than 35% from its last close. Analyst Joachim Klement warns the equity bull market could end sooner than many investors expect if bond yields and interest rates keep climbing.
British brokerage Panmure Liberum said on Monday the S&P 500 will retreat to 5,000 points by the end of 2027, warning that the equity bull market could end sooner than many investors expect. The index has extended the bull run that began in October 2022, and it has gained 12.8% so far this year. Panmure's 2027 target points to a drop of more than 35% from the index's last close of 7,722.72.
Resilience against rising rates
US stocks have stayed resilient against a series of headwinds, including stubborn inflation, rising bond yields, higher interest rates and a cooling of some of the optimism around the AI boom. According to Reuters: "the end of the equity bull market may be closer than many investors think," said Joachim Klement, research analyst at Panmure Liberum.
Klement said strong earnings growth and resilient economic data continue to support equities. Yet the upcoming third-quarter earnings season and companies' 2027 outlooks, due early next year, will test whether that strength can be sustained.
A lonelier call
Panmure's forecast stands in stark contrast to those of several other brokerages, which expect the S&P 500 to end 2026 at or above 8,000 and anticipate the bull market extending into next year. The brokerage also expects Europe's STOXX 600 to fall to 430 points by the end of next year. It sees the UK's FTSE 100 falling to 8,260 points over the same period, both markedly below current levels.
Further rate hikes by the Federal Reserve and the Bank of England could hasten the end of the current bull market, Klement said. Last month, major central banks including the Fed and the European Central Bank raised rates as policymakers sought to keep inflation in check amid rising energy costs and a resilient economy.
Source: Economy News
Trading involves risk.
Risk Disclaimer
