Fortune: Wall Street optimists defy recession predictions, bet on soft landing delivering market gains

Economic data published Friday bolstered the case for optimism. Another strong US jobs report showed hiring growth exceeded expectations as wage gains slowed more than anticipated. Euro-area inflation returned to single digits for the first time since August, fueling hopes that the bloc’s worst-ever spike in consumer prices has peaked.

Consecutive down years are very rare for the S&P 500, having taken place on just four occasions since 1928. Yet when they have occurred, drops in the second year have always been deeper than in the first, with an average decline of 24%. The average year-end target for the S&P 500 among strategists surveyed by Bloomberg in December was 4,078, which would imply a 6% gain for the index, though that largely reflects the big slump that took place at the end of the year. In November, the average forecast was for a decline.

Research from Bespoke Investment Group suggests year-end targets are usually about 5 percentage points off in either direction anyway. “We don’t generally do targets, just because we think they should be taken with a grain of salt,” said Bespoke cofounder Paul Hickey. “If there’s one thing I’ve learned through experience, it’s that when there is such widespread agreement on anything, things don’t usually play out as planned.”