Wall Street expects S&P 500 (^GSPC) growth to slow in 2025. Brian Mulberry, Client Portfolio Manager, Zacks Investment Management joins us wealth to share his market outlook.
Mulberry expects the market to return to “normal” in 2025, with revenues more closely matching revenue growth. He points out that the S&P has grown about 45% over the past two years, and much of the potential upside is already priced in.
“What this means is that while we are expecting a strong year with earnings up about 14%, we are only looking for a slow year with earnings that are only positive, maybe 8-10%.” he told Yahoo Finance. Mulberry warns that investors currently have a “false sense of security” about 20% returns.
Mulberry predicts that S&P 500 earnings could reach $280 per share by the end of 2025. However, he notes there are important concerns. That means Magnificent Seven shares account for about 70% of that expected growth. He acknowledged that it is “good news” that these companies are highly profitable and have strong cash positions, but there is also a risk of disappointment due to their high contribution to revenue growth. “Any disruption to that momentum would have a huge impact in terms of volatility,” he cautioned.
For 2025 investment opportunities beyond technology, Mulberry recommends taking defensive positions in financials, consumer staples, and durables.
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This post was written by angel smith
