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How the S&P 500 experts got it wrong in 2015

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Proving that forecasting isn't all plain sailing, analysts from the world's biggest banks had mixed success with their predictions for the S&P 500 last year.

The S&P 500, which tracks the biggest U.S.-listed companies closed down almost 1 percent on Thursday at 2,043 points. It ended the year down 0.73 percent after three straight years of double digit gains.

It marks a significant change from the 11.5 percent gain posted in 2014 and is also some way off forecasts collated by CNBC in December 2014. A mean average of the ten analysts' calls suggested the benchmark would finish 2015 at 2,185 points, with a gain of just over 6 percent.

Many, if not all, banks updated or changed their outlooks as the year progressed – and some still got it wrong.


Societe Generale calls 'hiccup'

Societe Generale's 2015 outlook was among the most bearish – and also the most accurate. In November 2014, the French bank predicted that global equity markets, including the U.S., would suffer a "hiccup" ahead of a rate hike by the U.S. Federal Reserve.

At the time, the S&P 500 was at 2,067 points and Societe Generale's global strategy team forecast the index would fall to 2,050 points by the end of 2015.

Societe Generale's call proved to be one of the closest calls on the S&P 500 from the major banks. It was roughly as accurate as Goldman Sachs' and Credit Suisse's prediction for a closing level of 2,100 points.

"The difficulty of being right in 2015 (was that it relied on) going against the crowd, which was very (too) optimistic about the U.S. economy at the end of 2014," Alain Bokobza, head of global asset allocation at Societe Generale, told CNBC via email.

"The Fed was clear that after (tapering asset purchases) would come tightening. And this cap on U.S. equities happened especially at a time when European and Japanese equities had much better growth potential through more monetary policy easing in the pipeline."

The bull call

Despite the S&P 500's tiny gains, the overall bull market for stocks entered its seventh year in 2015. A wave of global liquidity from central banks has helped to prop up developed economies in recent years and has been the main driver behind stock markets, according to many economists.

Canadian investment bank, RBC Capital, was among the most bullish of forecasters. It projected a 2015 year-end target of 2,325 points for the S&P 500, driven by a "combination of earnings growth and multiple expansion."

Instead, the index remained below 2,150 for the duration of the year and suffered some volatility, including when the Fed raised rates. The main market move, however, happened in August when the Chinese stock market crash spilled over into global markets and caused a correction in several U.S. benchmarks, including the S&P 500.

2016 projections

Goldman Sachs isn't much more optimistic on 2016 than it was for 2015. David Kostin, chief U.S. equity strategist at the bank, told CNBC that stock markets could be mostly flat in 2016.

"The margins for the market have been virtually static for the last four years," he told CNBC's "Squawk on the Street." in early December. "Finding companies with margin expansion opportunities is a key focus; one of our key strategies."

SocGen's Bokobza has a similar view, predicting that the S&P 500 would absorb the recent Fed rate hike and finish the year flat at around 2,050 points.

"U.S. dollar strengthening and high bond yields offset the strong U.S. GDP (gross domestic product) growth already priced in. The presidential election in November 2016 could also be a source of volatility for U.S. equities." Bokobza said in the French bank's 2016 outlook.