Barry Bannister is unhappy with the stock market’s run to record highs. The broad market index rose to record levels to start the fourth quarter, as the Federal Reserve began its rate-cutting cycle. This past month, the S & P 500 rose 3.2% to break above 5,800 for the first time. It closed at 5,815.26 on Tuesday, albeit lower. But Stifel Financial’s chief strategist stuck to his tough stance. “Despite all the optimism of a slow rate hike and Fed rate cuts, the S&P 500 is up nearly 40% for the year just passed,” he wrote in a note to clients. “Of course, we can be very picky and use a cyclically-adjusted rate of return with the highest value of the last 35 years to show about 10% going forward. [to 6,400]but that same analysis of century manias also puts the S&P 500 back in 2025 where it started in 2024 (down 26% from that potential peak). (and it fully reflects ) the Fed is likely to lower the real rate,” he added. “However, as the Fed cuts there is a cost to ‘winning so much,’ as that lowers the 2% inflation target. ” Bannister has been successful in calling market trends. On March 19, 2020, he said that stocks are close to the Covid-19 lows of early 2018, he called for a sharp correction due to a spike in Treasury yields, he said that he expects the S & P 500 to fall to 5,000 In the fourth quarter, the benchmark hit a new high. Although not included in CNBC Pro’s Market Strategist Survey, that forecast would mark Stifel as the second lowest among those surveyed. Elsewhere on Wall Street this morning, Citi upgraded Cisco Systems to buy from neutral. “With the advent of more AI, we are increasingly building the team and expect to continue to shift investors from semis/hardware to communications equipment to benefit the team.”
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