10. Tug of Battle
RBC Capital Markets’ year-end 2023 S&P 500 goal of 4,100 is unchanged (about flat with current ranges), though the agency lowered its 2023 S&P 500 EPS forecast by roughly 4% to $199, Lori Calvasina, U.S. fairness technique head, famous on a Nov. 30 podcast.
“We proceed to anticipate uneven circumstances in U.S. equities over the following few quarters,” she added, noting the agency prefers U.S. equities over non-U.S. equities, worth shares over progress, and small-cap over large-cap firms.
As for the S&P 500, she stated, “Our most optimistic check places the index at 4,600 — our ‘bull case’ if our ‘base case’ of 4,100 is simply too conservative.”
RBC’s S&P 500 EPS forecast contains expectations for sub-1% actual GDP all through 2023, a Shopper Worth Index that falls to three.1% at year-end 2023, a couple of Fed price cuts within the second half, and the 10-year Treasury yield returning to three.5%, she stated.
“We proceed to see shares as caught in a tug of struggle between the bulls and the bears,” stated Calvasina, noting the S&P 500 is usually down a month earlier than ultimate price hikes, which the agency expects in March. Then again, the outlook for investor sentiment, moderating inflation and barely decrease rates of interest recommend bullishness, she stated.
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