Barry Bannister is unimpressed by the inventory market’s run to file highs. The broad market index has soared to file ranges to begin the fourth quarter, because the Federal Reserve begins its rate-cutting cycle. Over the previous month, the S & P 500 has climbed 3.2% to interrupt above 5,800 for the primary time. It closed at 5,815.26 on Tuesday, regardless of a decline. However Stifel Monetary’s chief fairness strategist is sticking to his bearish stance. “Regardless of all of the soft-landing and Fed fee minimize optimism, the S & P 500 up virtually 40% y/y has merely over-shot,” he wrote in a observe to shoppers. “Positive, we will cherry-pick with one of the best of them and apply probably the most over-valued cyclically adjusted valuation stage of the previous 35 years to point out about 10% additional upside [to 6,400], however that very same evaluation of a century of manias additionally returns the S & P 500 in 2025 to the place 2024 started (down 26% from that potential peak).” “S & P 500 over-valuation has been supported by (and absolutely displays) the Fed doubtless reducing the actual funds fee,” he added. “Nonetheless, because the Fed cuts there’s a value to ‘a lot successful,’ as that undermines the two% inflation goal.” Bannister has had success calling market tendencies. In March 19, 2020, he appropriately stated shares had been close to the Covid-19 lows . In early 2018, he referred to as a pointy correction because of a spike in Treasury yields . Nonetheless, not all of his predictions have not panned out. This summer season, he stated he anticipated the S & P 500 to fall to five,000 by the fourth quarter. As a substitute, the benchmark has scaled new heights. Whereas not included in CNBC Professional’s Market Strategist Survey , that forecast would mark Stifel because the second lowest amongst these surveyed. Solely JPMorgan’s Dubravko Lakos-Bujas has a decrease year-end goal at 4,200. Elsewhere on Wall Avenue this morning, Citi upgraded Cisco Programs to purchase from impartial. “Whereas AI is presently a small piece of the biz (~2% of revs), we see the potential for a stronger contribution,” Citi wrote. “With extra AI coming, we’re incrementally extra constructive on the group and anticipate continued investor rotation out of semis/{hardware} into networking gear to profit group valuation.”
