Monday, January 25, 2021
Home Covid-19 More stock market records expected as coronavirus recovery continues in 2021

More stock market records expected as coronavirus recovery continues in 2021


The S&P 500 is on track for more record highs in 2021 as a COVID-19 vaccine fuels a reopening of the global economy, #Wall #Street analysts say.

The size of the expected gains varies across #Wall #Street with #Bank of #America seeing a 1.8% increase, #Morgan #Stanley forecasting a 4.5% return and #Goldman #Sachs forecasting a 15% advance.

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“We remain bullish on the U.S. equity market and expected the average stock to perform better than the index,” said #Morgan #Stanley equity strategist #Michael #Wilson. “This is typical during the recovery phase when earnings drive stocks rather than the multiple.”

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A continued rebound in economic growth will fuel strong topline growth while cost cutting helps boost margins, he said, noting a “broadening of market performance away from structural growth” will help propel the S&P 500 to his 2021 year-end target of 3,900.

The five mega-cap technology stocks — #Apple, #Microsoft, #Amazon, #Google and #Facebook — make up 22% of the S&P 500 and have returned about 48% this year compared to just a 4% return from the remaining 495 companies, according to #Goldman #Sachs.

#Strategists at the firm believe the stock market can still succeed in an environment where those stocks underperform next year. They say the benchmark S&P 500 could reach their 4,300 target should those five stocks gain just 5% next year should the remaining stocks average 20%.

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A “barbell strategy” made up of both tactical positions in deep value stocks and long-term holdings of secular growth stocks is the best way to play the market next year, the #Goldman strategists said.

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#Not everyone on #Wall #Street is expecting the S&P 500 to see strong gains in the year ahead.

“A lot of optimism is priced in already on vaccine/recovery,” wrote #Savita #Subramanian, equity and quant strategist at #Bank of #America. #Her 2021 year-end target for the S&P 500 is 3,800.

#Subramanian noted vaccine execution and longer lockdowns are among the risks stocks will encounter next year.



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https://www.foxbusiness.com/markets/stock-market-records-coronavirus-recovery-2021

#stock #market #records #expected #coronavirus #recovery #continues

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