Wall Street’s most bullish strategist cites a ‘big surprise’ pushing stocks higher: Morning Brief

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That is The Takeaway from right this moment’s Morning Temporary, which you’ll be able to sign up to obtain in your inbox each morning together with:

Wall Road continues to chase stocks and the US economy higher as earnings and progress impress.

However Wall Road’s greatest bull — John Stoltzfus at Oppenheimer Asset Management — is not simply extra optimistic about earnings and the Fed’s path, however shocked at how skeptics have been washed out throughout this 12 months’s rally.

“For us the massive shock this 12 months has not been a lot the resilience of the economic system however fairly the substantial capitulation among the many bears and bearish neighborhood in addition to improved broader investor sentiment,” Stoltzfus wrote.

On Monday, Stoltzfus, the agency’s chief funding strategist, raised his year-end worth goal for the S&P 500 to five,500, a brand new Road excessive. The S&P 500 closed at 5,218.19 on Monday.

Stoltzfus added that this shift “seems to be supported by wants to take a position for the long run fairly than chase the newest sizzling decide or actionable concept of the day.”

In different phrases, if there is a frenzy on this market its avatar will not be found in Leonardo DiCaprio pitching stocks in a strip mall on Long Island.

To not say this market is freed from hype.

As a result of if there is a single catalyst behind the present bull run it was the launch of ChatGPT in November 2022. Seen a sure manner, then, this market is not so totally different from the quick cash flows which have fueled market runs from days passed by.

Although as Yahoo Finance’s Josh Schafer has chronicled, the final a number of weeks of buying and selling have featured a broadening of the market rally away from AI-centric performs and in direction of sectors extra levered to the “actual economic system,” like power, utilities, and housing.

“We’re not saying that there is not some quick gamers on the transfer within the day after day and week to week motion or deny that some froth exists in some corners of the market,” Stoltzfus wrote, “however fairly that the recent market stuff to this point seems to be to have been offset by a broadening of the present rally throughout sectors, types, and market capitalizations offering offset to ‘irrational exuberance.'”

And whereas some strategists have mentioned the thought of upside situations for shares sending the benchmark index as high as 6,000 (or larger), Stoltzfus’s name is extra definitive.

Stoltzfus additionally acknowledges that, if something, his bullish outlook won’t be bullish sufficient.

Noting robust earnings, demographic components, and the economic system’s “resilience,” Stoltzfus wrote, “we would want to lift the goal worth once more later this 12 months ought to this financial and market outlook show us too conservative in our projections.”