According to John Stoltzfus, chief investment strategist at Oppenheimer & Co., “bullishness is reasonably high while the Fed remains short of its inflation target. Investors, he advised, should “right-size expectations” and temper their enthusiasm for a protracted rate halt or even a rate cut.
Stocks have been suffering from lingering worries that a robust economy will lead the US Federal Reserve to keep interest rates higher for longer. The US benchmark has fallen 3% since its peak in late July. The S&P 500 Index has been rising for the majority of this year due to the hype surrounding artificial intelligence, despite dangers from rates and a potential downturn in the economy.
“We could see some choppiness near term,” said Stoltzfus, who raised his forecast on the S&P 500 to 4,900 points in late July, the most optimistic prediction of the strategists polled by Bloomberg. The US standard has been under pressure ever since.
At Deutsche Bank AG, Stoltzfus’ colleagues predict a “modest extension of the current pullback.” According to experts Parag Thatte and Bankim Chadha, minor equity declines of 3% to 5% normally take place every two to three months.
David Kostin, a strategist for Goldman Sachs Group Inc., is more optimistic about the likelihood of a gentle landing for the US economy and predicts that the S&P 500 index will reach 4,700 in the coming year. Michael Wilson of Morgan Stanley disagrees, claiming that because this year’s economic growth is predicted to be weaker than average, US stock investors will be let down.