Factbox-Brokerages lift S&P 500 target on hopes for soft landing, rate cuts

BY Reuters | ECONOMIC | 06/12/24 09:28 AM EDT

(Reuters) -Brokerages have raised their year-end targets for the U.S. stocks benchmark S&P 500, spurred by expectations of a "soft landing" for the economy and growing odds the Federal Reserve will cut interest rates this year.

Following are forecasts from some major banks on economic growth, inflation, and how they expect certain asset classes to perform:

Forecasts for stocks, currencies and bonds:

S&P 500 US 10-year EUR/USD USD/JPY USD/CNY

target yield

target

Goldman Sachs 5,200 4.00% 1.12 145 7.05

Morgan Stanley 4,500 1 140 7.5

UBS Global 5,200 3.85% 1.09 148 7.25

Wealth

Management*

Wells Fargo 5,100-5,300 4.25-4.75% 1.06-1.10 156-160

Investment

Institute

Barclays 5,300 4.25% 1.09 145 7.20

J.P.Morgan 4,200 3.75% 1.13 146 7.25

BofA Global 5,400 4.25% 1.12 155 7.45

Research

Deutsche Bank 5,500 135

4.60% 1.07

Citigroup 5,100 4.30% 1.02 135 7.25

HSBC 5,400 3.00% 1.05 145 7.10

Oppenheimer

5,500

UBS Global 7.15

Research* 5,600 4.0% 1.05 160

* UBS Global Research and UBS Global Wealth Management are distinct, independent divisions in UBS Group

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U.S. INFLATION

U.S. consumer prices were unexpectedly unchanged in May amid cheaper gasoline, but inflation likely remains too high for the Federal Reserve to start cutting interest rates before September against the backdrop of a persistently strong labor market.

U.S. inflation (annual Y/Y for 2024)

Headline CPI Core PCE

Goldman Sachs 2.50% 2.5%

Morgan Stanley 2.10% 2.70%

Wells Fargo 3.0% 2.60%

Investment

Institute

Barclays 2.70% 2.4%

J.P.Morgan 2.50% 2.50%

BofA Global 3.5% 2.8%

Research

Deutsche Bank

3.10%

Citigroup 2.0% 3.0%

HSBC 3.4%

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Real GDP growth forecasts for 2024

GLOBAL U.S. CHINA EURO UK INDIA

AREA

Goldman 5.0% 6.6%

Sachs 0.8%

2.7% 2.6% 0.9%

Morgan 2.8% 1.9% 4.2% 0.5% -0.1% 6.4%

Stanley

UBS Global 3.1% 2.4% 4.9% 0.6% 0.2% 7.0%

Wealth

Management*

Barclays 2.6% 1.2% 4.4% 0.3% 0.1% 6.2%

J.P.Morgan 2.2% 1.6% 5.2% 0.4% 0.3% 5.7%

BofA Global 3.0% 2.5% 5.0% 0.6% 0.3% 5.8%

Research

2.4% 5.2% 0.9% 0.8% 7.0%

Deutsche

Bank 3.2%

Citigroup 1.9% 1.0% 4.6% -0.2% 0.1% 6.3%

HSBC 2.6% 2.3% 4.9% 0.5% 0.4% 6.3%

UBS Global 3.1% 2.3% 4.9% 0.6% 0.2% 7.0%

Research*

(Compiled by the Broker Research team in Bengaluru; Edited by Sriraj Kalluvila and Anil D'Silva)

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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