Piper Sandler chief investment strategist Michael Kantrowitz said investors who are hoping for a respite in the new year after a brutal 2022 are likely to be disappointed. He noted that the S&P 500 is likely to fall 16% to 3,225 points, the lowest level among all the forecasts tracked by Bloomberg.

If this forecast comes true, it will be the first time since 2002 and the fifth time in nearly a century that the benchmark index has fallen by double digits in at least two consecutive years. Kantrowitz said the market is struggling because the Fed is preoccupied with fighting inflation, and it would take time for higher borrowing costs to have an impact on the economy, so the blow to corporate earnings is likely to persist into next year.

Many expect the bear market to bottom out in the first half of the year before starting a recovery. The average year-end target among strategists surveyed by Bloomberg in December suggests a 6% increase in the S&P 500, which will push it to 4,078 points.