The bulls are stampeding down Wall Street, trampling any human yelling out “sell, sell, sell” amid escalating trade wars with China and now the European Union.
In short, welcome to the summer of mind-blowing — and ridiculously risky — calls on Wall Street as we eye the final months of the year.
Crossmark Global Investments strategist Victoria Fernandez tells Yahoo Finance she thinks 3,100 on the S&P 500 by year end looks reasonable. The march higher — the S&P 500’s last trade was about 2,967 as of the time of this writing — will unlikely happen in a straight line, Fernandez says, and investors still need to have some form of cautiousness.
“We are thinking about with inflation at about 1% to 2% you usually get [a price-to-earnings multiple] of 18 times, we are right around 17 times at this point in time. So, 3,100 looks reasonable to us,” Fernandez said on Yahoo Finance’s The First Trade.
Fernandez joins JPMorgan this week in making a rather bullish S&P 500 call.
“While trade uncertainty remains the single largest source of downside risk for equities, a trade deal along with central bank monetary easing and low equity positioning could push the S&P 500 beyond 3,200,” wrote Dubravko Lakos-Bujas, JPMorgan’s chief U.S. equity strategist, in a Monday note to clients.
JPMorgan somewhat tempered its optimism by noting its base case for the S&P 500 is 3,000 this year. A worse-case scenario: 2,500.
Thank you for all these buzzy calls, in large part, goes to the Federal Reserve. From Fed Chief Jerome Powell to New York Fed Chief John Williams, most of the FOMC have stoked the hopium on the Street with their open mouth operation efforts to drive hopes for an interest rate cut.
Investors love rate cuts.
And we suppose, thank you President Donald Trump for frequently attacking the Federal Reserve on Twitter. It seems as if with more attacks, the supposedly not political Fed comes out and blows a kiss to the markets.
Here comes 3,100... or more likely, 2,700 on the S&P 500.
Yahoo Finance’s Scott Gamm contributed to this story.