The Pulse of the Market

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The Pulse of the Market

Executive Summary / Lead Essay

Mid-Year Outlook Update

In A Nutshell

In Pulse, we tackle hot topics and other updates to the indicators we track regularly. The big things you need to know: First, we have refreshed our year-ahead outlook. Specifically, we are lifting our 12-

month S&P 500 price target to 8,150 from 7,900. We also think the recent outperformance of non-US developed markets and value could last a bit longer but ultimately expect equity market leadership to

return to the US and big cap growth after the recent valuation problem is resolved. Second, we run through our thoughts on the upcoming reporting season, noting that the bar seems high from a data

perspective. Third, the latest Duke CFO survey pointed to a slight downtick on economic optimism but slight optimism on the outlook for one’s own company, highlighting the ongoing resilience of

Corporate America post COVID.

Lifting Our 12-Month S&P 500 Price Target To 8,150; Thoughts on the Recent Leadership Rotations

With June coming to an end, we have completed our monthly refresh of our 12-month S&P 500 price target, which we have lifted to 8,150 from 7,900. When we froze our models this past Thursday, the

S&P 500’s price level was similar to that in place at the time of our last update in May and most of our models were sending the same signal or a similar one to what we’re seeing today. There are two

changes in our thinking and modeling to be aware of. The first is on methodology. We are once again linking our target to an approximation of the median and average of our five models on sentiment,

valuation/EPS, stocks vs. bonds, the GDP backdrop, and the monetary policy environment.