July 21, 2024

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Wall Street is getting even more bullish on stocks

2 min read

Nearly five months through 2024, the major stock indexes are near record highs.

Wall Street doesn’t think this rally is over, either, as the outlooks for earnings and economic growth have steadily risen throughout the year.

In the past two weeks, three equity strategists tracked by Yahoo Finance have boosted their year-end targets for the S&P 500. The median target on Wall Street for the benchmark index now sits at 5,250, up from the median target of 4,850 on Dec. 30, per Bloomberg data. The Street-high target has moved up to 5,600 from 5,200 to start the year too.

“The current environment is basically what the bulls were hoping for, and they are getting it,” Bank of America US and Canada equity strategist Ohsung Kwon told Yahoo Finance. “It’s basically a soft landing.”

Kwon explained that while inflation data has come in hotter than expected to start the year, it still hasn’t indicated that price increases are reaccelerating. Meanwhile, other data has signaled a slowing but strong economy, easing fears that red-hot growth could spark another inflation spike. In essence, this has fueled the soft landing narrative Wall Street bulls hoped for entering the year, per Kwon.

BMO Capital Markets chief investment strategist Brian Belski noted that markets have made an important shift as this data has come in. Markets are now pricing in about two rate cuts this year, down from a peak of nearly seven to start the year, per Bloomberg data. This aligns with the Fed’s most recent projections, in which officials favored two or three rate cuts this year.

“It has become clear to us that we underestimated the strength of the market momentum, particularly considering that investor expectations and Fed policy guidance have become essentially aligned vs. the significant disconnect that existed at the beginning of the year,” Belski wrote in a research note on May 15.

MAY 15th 2024: Record high closings for all three major market indexes on Wall Street as the Dow Jones Industrial Average, the S&P 500 stock market index and the NASDAQ Composite each closed at new all-time record highs. The Dow closed at 39,908, the S&P closed at 5308 and the NASDAQ closed at 16,742. - File Photo by: zz/STRF/STAR MAX/IPx 2020 6/14/20 Atmosphere in and around Wall Street and The New York Stock Exchange in the Financial District of Lower Manhattan, New York City on June 14, 2020 during the coronavirus pandemic amid the aftermath of protests, demonstrations, riots, vandalism and destruction of property in response to the death of George Floyd who died while being arrested by police officers in Minneapolis, Minnesota on May 25th. (NYC)

Atmosphere in and around Wall Street and The New York Stock Exchange in the Financial District of Lower Manhattan, New York…

2024-05-27 06:03:09

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