Panmure Liberum forecasts S&P 500 falling to 5,000, warns bull run nearing end

Oct 5 (Reuters) - The benchmark S&P 500 .SPX will retreat to 5,000 points by the end of 2027, Panmure Liberum said on Monday, warning that the equity bull market could end sooner than many investors expect.

US stocks have remained remarkably resilient against a series of headwinds, including stubborn inflation, rising bond yields, higher interest rates and a cooling of some of the optimism surrounding the AI boom.
The S&P 500 has extended the bull run that began in October 2022, gaining 12.8% so far this year. Panmure's 2027 forecast points to a drop of more than 35% from its last close of 7,722.72.

"If we keep seeing higher bond yields and interest rates, we think the end of the equity bull market may be closer than many investors think," said Joachim Klement, research analyst at Panmure Liberum.

Klement said strong earnings growth and resilient economic data continue to support equities, though the upcoming third-quarter earnings season and companies' 2027 outlooks due early next year will provide a crucial test of whether that strength can be sustained.
Panmure's forecast stands in stark contrast to those of several other brokerages, which expect the S&P 500 to end 2026 at or above 8,000 and anticipate the bull market extending into next year.
The British brokerage expects Europe's STOXX 600 .STOXX will fall to 430 points and the UK's FTSE 100 to 8,260 by the end of next year, both markedly below their current levels.
Adding to the challenges already confronting stock markets, further interest-rate hikes by the Federal Reserve and the Bank of England could hasten the end of the current equity bull market, Klement said.
Last month, major central banks including the Fed and the European Central Bank raised rates as policymakers sought to keep inflation in check amid rising energy costs and a resilient economy.