During the early weeks of the pandemic, the stock market was in an absolute free fall as economists feared the COVID-19 recession could slip into a depression. By late March 2020, the S&P 500 Index was down a staggering 31% from the month prior. It didn’t last long: Even before the lockdowns ended last year, the stock market and economy both kicked into a speedy recovery. In fact, on paper it’s one of the fastest rebounds on record. The rally was so strong the S&P 500 Index ended 2020 up 16% on the year.
That run, at least for many non-tech stocks, has carried over into 2021. Through 11 months this year, the S&P 500 Index is up another 21.3%. For comparison, the average return this century is 10.6% per year.
But where is the stock market headed in 2022? To get an idea, Fortune reviewed forecast models published by Bank of America, Goldman Sachs, JPMorgan, and Morgan Stanley.
The big takeaway is, well, there isn’t one.
These forecasts are all over the place—ranging from projecting another above-average year to predicting we are on the heels of a small pullback.
Among these investment banks, the models produced by Goldman Sachs and JPMorgan are the most bullish. The Goldman Sachs model predicts the S&P 500 Index climbing from the Tuesday close price of 4,567 points to 5,100 points (up 11.7%) by the end of 2022. That parallels JPMorgan’s 5,050 prediction (a 10.6% gain). While Goldman Sachs researchers are confident retirement accounts are poised to see another bounce, they acknowledge 2021 headwinds like “decelerating economic growth, a tightening Fed, and rising real yields.”
Meanwhile, Bank of America thinks the stock market will essentially be flat next year. BofA forecasts the “lackluster” S&P 500 Index will finish 2022 at 4,600 points. That would mark just a 0.7% gain. BofA notes most of that gain will come from small-cap stocks—not the large-caps which have performed better during most of the pandemic.
Of the four models, Morgan Stanley is clearly the most bearish. The investment bank foresees the S&P 500 Index ending 2022 at just 4,400 points—or a 3.7% drop from the current price.
The relatively bearish prediction by the team at Morgan Stanley can be chalked up to the Federal Reserve. On Tuesday, Federal Reserve Chair Jerome Powell acknowledged to the Senate Banking Committee that stubbornly high inflation might stick around for quite some time. Indeed, Powell said, the fact that inflation no longer looks “transitory” increases the odds the central bank will be “wrapping up the taper of our asset purchases” sooner rather than later.
Of course, if the Federal Reserve winds down asset purchases or lets interest rates rise, that would have a direct impact on the stock and bond market.
“For markets, shifting central bank policy means that the training wheels are coming off, so to speak. After 20 months of unprecedented support from both governments and central banks, this extraordinary aid is now winding down. Asset classes will need to rise and fall or, for lack of a better word, pedal under their own power,” said Andrew Sheets, chief cross-asset strategist at Morgan Stanley, last week on the Thoughts on the Market podcast. “We think earnings are actually pretty good, but that the [stock] market [in 2022] assigns a lower valuation multiple of those earnings—closer to 18x or around the average of the last five years as monetary policy normalizes.”
This story was originally featured on Fortune.com