Markets continue to rally this year, with the S&P 500 up nearly 22% year to date and the Nasdaq up nearly 21%. In global stocks, the MSCI World index is about 16% higher. Many on Wall Street expect the trend to continue. Goldman Sachs, Morgan Stanley and others all see the S&P 500 at around 6,000 by the end of the year, up from around 5,730 on Tuesday. Mary Ann Bartels, chief investment strategist at Sanctuary Wealth, said that while stocks are facing various concerns, “money is important and plentiful now that the Fed has started to cut interest rates, and that means markets can continue to grow. Jump higher.” “October, historically a volatile and risky month for markets, may bring turmoil to the stock market, but the overall trend is clear: stocks are rising and products are declining,” he wrote in an Oct. 2. He added that consumer spending remains strong. Meanwhile, the latest data shows that the US Federal Reserve may be close to reversing the much-discussed economic slowdown. However, Wells Fargo in a Sept. 30 warned: “The Fed’s aggressive start to its tapering cycle also leaves financial markets exposed to increased volatility by encouraging risk-taking and profit-taking, anticipating early growth at risk of inflation and higher interest rates.” With markets already higher, CNBC Pro checked for global stocks that outperformed the MSCI World index, but still looked cheap based on their previous price-to-earnings ratios. Here’s the criteria we used: Forward P/E at a discount of 10% or more to the forward P/E ratio over the past five years. Returns of more than 16% so far this year, outperforming the MSCI World index. At least half of the analysts who cover the stock give it a buy rating. Consensus price targets give the stock at least 15%. These stocks appeared.
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