The worst is over for stocks but the bull market is 'stuck in traffic', Wells Fargo says
Wells Fargo pointed to a narrowing in investment-gradeCredit spreads reflect the difference in yield between corporate bonds and similar-maturity government debt, with a tightening gap seen by economists as a sign of market health.
"Bear markets often end when we see sharp tightenings and healthy issuance similar to what we have experienced over the last several months," the analysts said."When bear markets go 'next level' spreads widen, not tighten."Harvey's team said that S&P 500 share prices still look high relative to companies' earnings – and that more bullish market voices are discounting the potential risk of an economic downturn.
"It is not April 2020 and we do not envision a sustained rally in risk," Wells Fargo said, referencingthat took place between the start of the US's COVID-19 lockdowns and the end of 2021. "A continued re-pricing of risk is neither supported by valuations nor the economy. Expect a near-term reversal," the strategists added.
Harvey maintained an end-of-year target for the S&P 500 of 4,200 points – which would represent a rise of just 2.7% from the 4,090 level the benchmark traded at as of Monday's closing bell.
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Morgan Stanley downgrades XPO, says logistics company is a 'show me story' after latest quarterMorgan Stanley is the latest firm downgrading the stock after earnings, following Wells Fargo and Jefferies.
Read more »
'Fed is not your friend': Wells Fargo delivers warning ahead of key inflation reportWells Fargo Securities' Michael Schumacher believes Fed policy is working against equity investors regardless of this week's inflation data outcome.
Read more »
‘A different animal’: The bear market is ‘over,’ but that doesn’t unleash bulls to send stocks on a 2023 tear, according to Wells FargoThe bear market is finished as U.S. stocks climb in 2023, yet the upside is limited, according to Wells Fargo & Co.
Read more »
Flyers start off Philadelphia’s Super Bowl Sunday with a 4-3 loss to the KrakenThe Wells Fargo Center was buzzing with Eagles excitement, but Seattle took the momentum away from the Flyers.
Read more »
Black History Month: Who is journalist Ida B. Wells-Barnett & what’s her connection to Jacksonville?Ida B. Wells-Barnett, who was investigative journalist, is known for documenting lynchings of African Americans in 20th century
Read more »
What a Wall Street bear needs to see to flip bullish on stock marketHere's what needs to happen for one of Wall Street's biggest bears to flip bullish and be won over by the stock market
Read more »