Wall Street’s most bullish strategist names the ‘big surprise’ for rising stocks: Morning Brief

[ad_1]

Here are the takeaways from today’s Morning Brief. sign up Every morning you will receive the following message in your inbox:

Wall Street continues to track the rise in stocks and the U.S. economy amid impressive profits and growth.

But Wall Street’s biggest bull, John Stoltzfus of Oppenheimer Asset Management, is not only optimistic about earnings and the Fed’s path, but also about how this year’s bull market has dispelled skeptics. I’m also surprised.

“For us, the big surprise this year is not so much the resilience of the economy, but rather the significant capitulation of the bears and the bearish community and the improvement in broad investor sentiment,” Stoltzfus said.

Stoltzfus, the firm’s chief investment strategist, on Monday raised his year-end price target for the S&P 500 to $5,500, a street high. The S&P 500 closed at 5,218.19. on monday.

Stoltzfus added that this shift “seems to be driven by a need to invest in the future rather than chasing the latest hot topic or the practical ideas of the day.”

In other words, if there’s a frenzy in this market, its incarnation won’t be found in Leonardo DiCaprio hawking stocks in a Long Island strip mall.

That’s not to say there’s no hype in this market.

Because if there was a single catalyst behind the current bull market, it was the launch of ChatGPT in November 2022. So, in some ways, this market is not that different from the rapid flow of money that has fueled the rally over the past few days.

As Yahoo Finance’s Josh Schafer has documented, in recent weeks the market’s gains have shifted away from AI-centric moves and toward sectors more reliant on the “real economy” such as energy, utilities, and housing. It is characterized by its wide spread.

“We’re not saying there aren’t faster players moving day-to-day and week-to-week, and we’re not denying that there are bubbles in some parts of the market,” Stoltzfus said. wrote. So far, the current bull market appears to be extending across sectors, styles, and market caps, offsetting the “irrational exuberance.” ”

And while some strategists are discussing upside scenarios for stocks that push the benchmark index to the 6,000 level (or higher), Stoltzfus’s argument is more definitive.

If anything, Stoltzfus also acknowledges that his bullish outlook may not be bullish enough.

Citing strong earnings, demographic factors and the “resiliency” of the economy, Stoltzfus said: “If this economic and market outlook proves our forecasts are too conservative, we will be increasing our price target later this year. We may need to raise it again.”