---
title: "Wall Street strategist faces short squeeze: annual forecast turns around, US stock performance exceeds expectations"
type: "News"
locale: "zh-CN"
url: "https://longbridge.com/zh-CN/news/213308912.md"
description: "Wall Street strategists underestimated the performance of the US stock market in their annual forecasts at the beginning of the year, leading to a frenzy of upward revisions towards the end of the year. Economic expert Jonathan Levin pointed out that since 2020, major tech stocks have accounted for half of the S&P 500 index's performance, while both strategists and economists have generally misjudged the actual growth of the US economy. Despite many forecasts relying on old rules of thumb, the ultimate result shows that the US economy will continue to grow strongly"
datetime: "2024-09-03T12:02:07.000Z"
locales:
  - [zh-CN](https://longbridge.com/zh-CN/news/213308912.md)
  - [en](https://longbridge.com/en/news/213308912.md)
  - [zh-HK](https://longbridge.com/zh-HK/news/213308912.md)
---

> 支持的语言: [English](https://longbridge.com/en/news/213308912.md) | [繁體中文](https://longbridge.com/zh-HK/news/213308912.md)


# Wall Street strategist faces short squeeze: annual forecast turns around, US stock performance exceeds expectations

According to Zhitong Finance, Jonathan Levin, a columnist specializing in the US market and economy, pointed out that since the outbreak of the pandemic, Wall Street strategists have repeatedly underestimated the performance of the US stock market in their annual forecasts at the beginning of the year. This has led them to crazily raise their annual target forecasts for US stocks towards the end of the year. A series of upward revisions may seem a bit like "short squeeze," a situation where traders are forced to quickly cover consecutive bearish bets, usually strengthening the upward momentum of securities. In this sense, strategists have experienced the largest short squeeze in 10 years this year, and seasonal trends indicate that this situation may continue in the coming months.

Strategists usually make significant adjustments to their target prices for the S&P 500 index at the end of the year.

Levin pointed out that overall, the performance of market analysts' forecasts varies, but it has proven particularly difficult for strategists to grasp the current US stock market.

**Firstly, the outstanding performance of large growth companies has overturned traditional models that explain the relationship between macroeconomic conditions, interest rates, and the fair value of the S&P 500 index.** Since the beginning of 2020, five companies including NVIDIA (NVDA.US), Apple (AAPL.US), Microsoft (MSFT.US), Alphabet (GOOGL.US), and Amazon (AMZN.US) have accounted for nearly half of the benchmark index's performance. This means that if macro models cannot explain the special situations of these companies, including the artificial intelligence theme, they are insufficient. Although some stocks have benefited from continuously rising price-to-earnings ratios, the main drivers of their rise are significant revenue and profit growth.

**Secondly, economists and strategists have consistently misjudged the strength of the US economy.** In early 2023, the median forecast of economists indicated that they believed the US economy could barely survive 2023. However, the reality was the opposite, with the US economy growing by 2.5%, and it appears likely to reach this level again this year. Most forecast errors may have been due to excessive reliance on old rules of thumb, including the view that Fed rate hikes usually lead to economic downturns. In a "normal" economic cycle, this may be correct, but post-pandemic, the reality of the US economy is employers hoarding labor, consumers returning to restaurants and concerts regardless, and high home values. Economists may have also underestimated the capital expenditures brought about by the artificial intelligence arms race and the impact of President Biden's industrial policies on the macroeconomy Economists have recently underestimated the resilience of the US economy.

However, the average forecast by strategists shows that the S&P 500 index is expected to fall by about 3% this year, closing at 5469 points (with a median of 5600 points and a forecast range of 4200 to 6000 points) - **Levin finds this forecast puzzling, as many parts of the economic narrative for 2023-2024 remain intact and are supported by real-time data.** The Atlanta Fed's GDPNow model shows that the current annualized growth rate of the US economy is 2.5%. Among the companies in the S&P 500 index, about 81% have exceeded Wall Street's expectations in the current earnings season, including leaders in the consumer industry such as Target Corporation (TGT.US) and Walmart Inc. (WMT.US). Long-term borrowing costs have already started to decline significantly before the Fed may begin cutting rates in September. Initial jobless claims indicate that layoffs are not out of control, and the recent sharp drop in the stock price of NVIDIA, a leading AI chip manufacturer, is more due to specific production obstacles rather than the long-term prospects of artificial intelligence.

**Meanwhile, apart from the tech giants, other stocks seem to be catching up. Excluding the top five constituents, it is expected that the earnings growth of companies in the S&P 500 index will accelerate by 2025.**

![image.png](https://imageproxy.pbkrs.com/https://img.zhitongcaijing.com/image/20240903/1725363667551708.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg)

US stock earnings growth is spreading beyond the tech giants.

**Levin writes, of course, the current blended forward price-to-earnings ratio of the S&P 500 index is 21.3 times, at historical highs; however, with support from fundamentals and compelling stories, high valuations can remain elevated for a long time; given that another round of strategist shorting seems likely this autumn and winter, it is hard to imagine a liquidation coming soon.**

### 相关股票

- [S&P 500 (.SPX.US)](https://longbridge.com/zh-CN/quote/.SPX.US.md)
- [NASDAQ Composite Index (.IXIC.US)](https://longbridge.com/zh-CN/quote/.IXIC.US.md)
- [Dow Jones Industrial Average (.DJI.US)](https://longbridge.com/zh-CN/quote/.DJI.US.md)

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