Our monthly S&P 500 forecast for December is a 0.44 percent drop over the average of November.
The model-based forecast takes into account the changes in oil prices and yield spreads. However, a forecast model cannot possibly capture the full impact of uncertainty caused by the war in Ukraine, or the tensions in the Middle East.
Our quarterly S&P 500 forecast for 2024 Q4 (average price returns) indicates a 5.9 percent growth over the previous quarter. We predict 4.6 percent growth for 2025 Q1 over the last quarter of 2024. Our monthly forecast for December is lower than November’s average. Geopolitical problems such as the Russia-Ukraine, and the Israel-Palestine conflict cannot be captured in a forecast model. Thus, any uncertainty concerning these issues makes the 95 % confidence interval around the point forecast rather wide.
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