Wall Street's 'Crystal Ball' Shatters as Stocks Stage Big Rally

"As enticing as it may be to follow the tape and nudge our year-end target higher, we just do not see the fundamental justification for this, yet," he said.

In these weird post-pandemic times — where the economic and market cycle upends conventional wisdom — bears who appeared to be geniuses one quarter risk looking like cranks the next.

Meanwhile, those who've earned fame betting on the tech boom are more than a little paranoid that their bullish outlooks will seem bubblicious if things go south.

More broadly, when it comes to stock market calls, there are four quadrants: bullish, bearish, right, and wrong, according to Adam Parker, Morgan Stanley's former chief U.S. equity strategist.

"The worst quadrant to be in when you work at one of those firms is bearish and wrong because you didn't really enable your upside capture for clients," said Parker, who now heads up Trivariate Research. "I've been there, and I lived in all four quadrants – it's a hard place to be."

Piper Sandler's Michael Kantrowitz is feeling the heat. He still sees the S&P 500 plunging to 3,225 by the end of this year, the gloomiest target out there. He has no plans to change his outlook, for now.

In his view, the recent upward revisions to strategist targets resemble the momentum chasing in 2000 and 2007, when he says sell-siders pushed investors in front of a "proverbial bus."

On the flipside, Oppenheimer Asset Management Inc.'s John Stoltzfus is enjoying better days. At one point last year he forecast the S&P 500 would end 2022 at 5,330. It closed at 3,839.5.

This year he entered with a target of 4,400 — and he's thinking about raising it while awaiting further inflation and employment data after the Fed skipped on a June rate hike.

When the market bottomed out in October, "what we think happened at that point is a lot of the negative projection that had been put out by the bears in 2022 essentially took everything that was wrong or uncertain and projected it into infinity," he said. "That happens in bear markets."

Meanwhile, Parker says it makes more sense to be cautious than it did seven months ago, given the rising stretch across US stocks and deteriorating credit. But abruptly shifting views risks undermining the credibility of a strategist's framework.

"I just don't think you ever want to be a perma-anything," he said. "Because data changes, and I think you have to react to and absorb the new data and fit that into your thesis."

–With assistance from Matt Turner, Mark Tannenbaum and Jessica Menton.

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