Following a surprisingly strong start to 2023, stocks may not have a lot more room to run over the coming year, say experts in Bankrate’s Second-Quarter Market Mavens Survey. The survey shows these pros think the S&P 500 will rise just 3.6 percent over the next 12 months.

Respondents expected the S&P 500 index to climb to an average of 4,453.50, up from the close of 4298.86 when the survey period ended on June 9. Despite the prospective low returns, it’s the 11th straight time that the survey has predicted gains in the year ahead. These experts continue to like U.S. stocks over international ones, and tap growth stocks to outperform value.

“There’s no question that despite the strong doses of interest rate medicine administered since March 2022, the economy has proven more resilient,” says Mark Hamrick, Bankrate’s senior economic analyst. “That could translate to a solid base for market fundamentals for the months ahead.”

Forecasts and analysis:

This article is one in a series discussing the results of Bankrate’s Second-Quarter 2023 Market Mavens survey:

Experts foresee stocks rising over coming year

After a torrid first half of the year, the S&P 500 index is poised for a slower rise over the next 12 months, say the experts in Bankrate’s survey. With the Fed taking a breather in raising rates in June and likely only a couple more rate hikes on the table according to its own estimates, the potential for a recession may be weighing on our experts’ expectations for the year ahead.

On average, the pros forecast the S&P 500 to climb 3.6 percent over the next 12 months, to 4,453.50. That follows a rise in the index of nearly 15 percent through June 16, a brisk move higher in any year.

While some analysts think that a new bull market is well underway, pointing to strong rally off the market’s October 2022 low, others think that there’s still room for the market to fall as the Fed has yet to cut rates.

“I think we have seen the lows this cycle,” says Dec Mullarkey, managing director, SLC Management. “Large-cap companies, in particular, have shown remarkable resilience in protecting their margins.”

“We don’t think a new, and true, bull market will start until the Fed shifts into a rate-cutting mode, which is likely to be sometime in 2024 as its prior rate hikes start to be felt more acutely over the second half of 2023 and/or the first half of 2024,” says Patrick J. O’Hare, chief market analyst,

That type of fundamental disagreement could make the market volatile as events play out.

As for when a bull market might begin? The majority of respondents said that it already had:

  • 50 percent said that a new bull market has already begun or is beginning here in the first half of this year.
  • 25 percent said that a new bull market will begin in 2024.
  • Almost 17 percent said that a new bull market may begin in the second half of this year.
  • About 8 percent offered no comment.

“A new bull market most likely began in October 2022 and will continue with significant stops and restarts along the way in response to important events,” says Hugh Johnson, chief economist, Hugh Johnson Economics. “Next stop is likely to be touched off by a hard landing in Q3 or Q4 2023,” he says, “But only a stop.”

Others point to the Fed’s actions as the clear pivot for when the market will hit a bottom.

“We see a recession in the second half, lasting into the early part of 2024,” says Sameer Samana, senior global market strategist, Wells Fargo Investment Institute. “Given that markets typically bottom before the economy, they should see their trough very late in 2023.”

“Market Mavens and economists alike will be watching for signs whether the Federal Reserve’s stance toward monetary policy could be more accommodating for stock investors, depending upon the status of the war on inflation,” says Hamrick.

Five-year stock returns should be in line with averages

The Bankrate survey revealed that the experts grew more moderate in their expectations for the market’s performance over the next five years, becoming less optimistic and less pessimistic than they were in the first-quarter survey:

  • 25 percent said returns will be lower than long-term returns.
  • 75 percent of respondents said returns will be about the same as their historical average over the next five years.
  • No one said returns will be above the historical average.

In other words, fewer respondents expected above-average returns and fewer expected below-average results, producing a huge majority that expected average returns.

Analysts posited several different reasons for expecting returns to fall in with historical averages.

“Given that valuations are close to fair value, we would expect returns close to their historical average,” says Samana.

“Five years is a long time for this manic market, which is now starting to embrace the productive possibilities of AI while contending with increased geopolitical tension, a normalization of interest rates, and demographic hurdles,” says O’Hare. He adds: “Paired with other factors, like increased geopolitical tension, potential restrictive activity by central banks, and possibly disruption in the labor market and high debt levels, the next five years seem apt to produce returns that are about the same as their historical average.”

Those expecting lower-than-average returns pointed to a few key fundamental economic reasons as well as plain old valuation.

“Sluggish growth and sticky inflation will likely curtail future returns relative to longer-term averages,” says Sam Stovall, chief investment strategist, CFRA Research.

Brian Nick, former chief investment strategist, Nuveen, notes that today’s starting valuation is higher than average, making normal or above-average returns harder to come by.

U.S. stocks still set to outperform international stocks, say pros

The market mavens still favored U.S. stocks over their international peers in the latest survey but they were much less partial to them than in the first quarter:

  • About 42 percent of respondents favor U.S. stocks in the coming year.
  • About 33 percent prefer international stocks.
  • 25 percent said the returns between the two would be about the same.

In the first-quarter survey, about 69 percent of the pros picked U.S. stocks, so the latest survey saw significant decline there. Last time international stocks garnered 15 percent of the vote, while only 7 percent said that returns would be about the same.

Some analysts preferred American stocks on macroeconomic concerns.

“The U.S.’s legal and regulatory environment is still the most favorable for companies in the world,” says Kim Forrest, chief investment officer and founder, Bokeh Capital Partners. “Our Fed acted first, and fast, to raise rates and the rest of the world is catching up.”

“As the U.S. nears the end of its tightening cycle and inflation recedes, U.S. companies are well positioned for growth,” says Mullarkey. “Their earnings have been resilient so far and many are now focused on efficiency improvements which should help sustain and improve margins.”

Those who preferred global equities often pointed to their relatively attractive valuations.

“The disparity in valuations and drivers of year-to-date returns,” – with U.S. stock gains propelled by multiple expansion rather than robust earnings growth – “indicates non-domestic equities are more likely to outperform on a relative basis,” says Kenneth Chavis IV, CFP, senior wealth counselor, Versant Capital Management.

“The global equity market is likely to go through a sea change over the coming year, with the most compelling valuations coming from overseas markets,” says Stovall.

Growth stocks are again pros’ pick to outperform

Growth stocks are again a better pick than value stocks for the year ahead, say the analysts. It’s the second straight time that they favored growth stocks. Here’s how the numbers break down:

  • About 58 percent of respondents prefer growth stocks to value stocks over the next year.
  • About 33 percent favor value stocks to outperform growth.
  • About 8 percent think returns will be about the same.

Value stocks fell significantly in analysts’ estimation in the last two surveys, and it’s been a big turnaround for growth stocks, since a year ago just 9 percent of the experts favored them.

“Growth still has the edge,” says Mullarkey. “Earnings season continued to affirm the resilience of larger companies in particular.” He also noted: “The potential of AI and other technology to transform business processes is exciting investors about a new growth surge.”

“If we are right about growth slowing in coming months, investors are apt to gravitate toward quality growth stocks,” says O’Hare. “However, that has been a popular trade already in 2023, so we may be looking at things more in terms of relative strength than absolute strength for the growth stocks over the forecast period.”

“Investors will gravitate to new ideas, new applications and growth stocks are most likely,” says Marilyn Cohen, CEO, Envision Capital.

Others still favored value stocks because of their attractive valuations.

“Given growth’s year-to-date outperformance driven by multiple expansion, value may shine better if and when earnings compress,” says Chavis.


Bankrate’s second-quarter 2023 survey of stock market professionals was conducted from June 1-9 via an online poll. Survey requests were emailed to potential respondents nationwide, and responses were submitted voluntarily via a website. Responding were: Dec Mullarkey, managing director, SLC Management; Patrick J. O’Hare, chief market analyst,; Marilyn Cohen, CEO, Envision Capital; Sameer Samana, senior global market strategist, Wells Fargo Investment Institute; Hugh Johnson, chief economist, Hugh Johnson Economics; Sam Stovall, chief investment strategist, CFRA Research; Kenneth Chavis IV, CFP, senior wealth counselor, Versant Capital Management; Brian Nick, former chief investment strategist, Nuveen; Brad McMillan, chief investment officer, Commonwealth Financial Network; Chuck Carlson, CFA, CEO, Horizon Investment Services; Michael Farr, CEO, Farr, Miller & Washington; Kim Forrest, chief investment officer/founder, Bokeh Capital Partners.

Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.