15 Wall Street Strategists' Year-End Estimates - 20% Upside?
The average S&P 500 year-end target from 15 Wall Street Strategists suggests a 20% gain from current levels.
Market and Economic Update
Equity markets staged a relief rally this week on encouraging signs that inflation and consumers' expectations for future inflation may have peaked. Prices of commodities such as lumber and copper have turned lower, suggesting inflationary pressures could be decreasing. The University of Michigan's Consumer Sentiment Survey for the end of June showed a slight decrease in consumers' expectations for future inflation.
Recession Watch #4 - CEO's Urge Caution
In February, I began sharing that the risks of a recession were rising; those risks continue to increase, but there are reasons for optimism. In addition to hard economic data, I also consider qualitative data, which can be the opinions of subject matter experts or people in a position to have additional information. This week several Fed officials shared their views on the future path of interest rates. Several business leaders expressed concerns about the economy; those opinions should be weighed along with the market and economic data in forming an investment thesis.
Could last Week’s Rally be a Head-Fake?
The S&P 500 broke its seven-week losing streak last week with a solid multi-day rally of more than 6%. In recent years, we've become accustomed to market corrections followed by rallies to new highs. Last week's rally could be the beginning of stabilization in equity markets, but it could also be a head fake.
Economic and Market update
Markets remain volatile as market participants adjust to higher interest rates and a less accommodative Federal Reserve. Adding to the uncertainties are the war in Ukraine and the ongoing COVID-19 lockdowns in China.
It’s different this time!
I often look to history as a guide to what might happen next. And yet we find ourselves at a unique time in history. We are emerging from a global pandemic; there is an active war in Europe, inflation is at multidecade highs, and the Federal Reserve is raising interest rates when the economy shows signs of slowing. Parts of the bond yield curve have inverted, there are recession fears, and yet companies have more job openings than we have people. We have experienced all these conditions at times in the past and can glean insight from what happened next, but we’ve never had a time when all these conditions coincided.