Spark Trader Limited reports:
Despite this week’s volatility, Wall Street bulls are encouraging investors to remain optimistic. He doesn’t think the CORONAVIRUS Delta variant and fed tightening will trigger a big drop in U.S. stocks.
John Stoltzfus, chief investment strategist at Oppenheimer Asset Management, said on Wednesday:
“Not only do I think stocks will edge higher, I think the S&P 500 could reach our target of 4,700 by the end of the year.”
He has a 7% price target for the S&P 500. The benchmark index fell 1.1 per cent to 4400.27 on Wednesday as minutes of the Fed’s policy meeting last month showed members thought the employment threshold needed to cut economic support “could be reached this year”.
“It’s natural what we’re going through right now as a transition. We are getting rid of COVID-19. The Biden administration has moved to provide booster shots for all adults starting September 20… That looks very good for the economy and for the reopening.”
Delta variants and Fed tapering won’t trigger a sell-off
But at the same time, consumers appear to be tightening their wallets. The university of Michigan’s preliminary consumer sentiment index plunged more than 13% from July to 70.2 in August, well below market expectations of 81.2 and the lowest level since December 2011, according to the latest survey data.
Also this week, U.S. retail sales for July were disappointing. Retail sales fell 1.1 per cent in July from the previous month, a sharper decline than consensus forecasts.
Stoltzfus said it’s too early to worry about the Delta variant’s impact on consumer spending and slowing economic growth. He said:
“I’m not surprised that consumers have pulled back a bit. It does remain the main risk, but it seems… We are moving in the direction of risk reduction. We think the market will soon realise that.”
He also expects the market to take any tapering in its stride. He added:
“Are we going to see some volatility? Oh, yes, but the fluctuations… It will be manageable and easy to digest.”
Stoltzfus said he would take advantage of weakness in the stock market to buy broadly. His main strategy: a barbell approach with a bias toward consumer discretionary, finance, industry and information technology.
Reprint indicated source：Shine Trader Limited Live information