Piper Sandler & Co.'s macro research team will no longer publish a single-number forecast for where the S&P 500 Index will end the year, calling it an inefficient way to communicate with clients.
Predicting the U.S. equity benchmark's performance in absolute terms has become futile in light of the concentration of companies in the gauge, with the 10 biggest stocks accounting for 37% of the index, according to Piper Sandler's chief investment strategist Michael Kantrowitz.
"I didn't see the value in raising my target again, given how it's become such a poor form of explaining stocks, which is what it was initially meant to represent," he said. "Having target prices on individual stocks makes sense, but makes less sense nowadays for the index."
Kantrowitz held a bearish outlook on the stock market through most of 2023, but reversed his view at the end of the year. In February, he raised his S&P 500 target again to 5,250.
The index is currently trading at more than 5,500.
Tony Dwyer, who recently left his day-to-day strategist role at Canaccord Genuity LLC, is among the soothsayers who've abandoned year-end targets for the S&P 500, saying it's impossible to make calls when only a handful of stocks comprise such a large share of the index's market value.
