(Bloomberg) -- The S&P 500 Index has likely logged most of the gains it will see this year as investors are growing increasingly nervous about the stock market’s rich valuations, according to the latest Bloomberg Markets Live Pulse survey.
The 2024 rally, which has driven the US equity benchmark to 31 record closing highs, has left the asset class more overpriced than US credit or gold, a majority of the 586 respondents said. After soaring roughly 50% since October 2022, driven by technology shares, the bull market has delivered a greater advance than the median of its predecessors going back to 1957.
Investors aren’t looking to hit the sell button just yet, but signs of skittishness are evident as about half of survey takers say stocks will see the beginning of a correction of at least 10% this year, with 35% saying that will happen in 2025. That overarching sense of caution is also apparent in the options market, where traders have been building hedges against potential losses in tech stocks.
With the economy and earnings still growing, and ample liquidity sloshing around in the financial system, most poll participants see scope for additional gains this year, but only a modest amount. The survey’s median projection is for the S&P 500 to finish 2024 at 5,606, almost 3% above Friday’s close. That’s a cheerier view than Wall Street strategists’ median target, which is for the index to be little changed from current levels at year-end.
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