In a twist that could only be described as delightfully absurd, investment banking behemoth Morgan Stanley has decided that the S&P 500 is not just going to revisit its April lows, but instead, it’s gearing up for a cosmic leap to new all-time highs within a year. 🚀
Andrew Sheets, the global head of corporate credit research (a title that sounds like he might also be in charge of intergalactic diplomacy), recently graced CNBC with his predictions. He confidently asserts that the S&P 500 will surge by nearly 8% in 2026, all thanks to a macroeconomic backdrop that’s more favorable than a warm cup of tea on a rainy day. ☕️
According to Sheets, the stock market has bravely digested the odds of a US recession and is now poised to climb higher, like a cat that has just spotted a laser pointer. 🐱
“We think the inflation data will pick back up a little bit, we do think growth is going to slow some. But importantly, we think the equity market is forward-looking and we think the equity market is going to look ahead to a better rate of change. We’ve already started to see some of the earnings revision numbers incrementally get better,” he mused, likely while gazing into a crystal ball. 🔮
“We think that the dollar has been weak. We think it continues to be weak. That’s a tailwind for earnings,” he added, as if the dollar were a tired old dog that just can’t keep up anymore. 🐶
“So we think the market is going to see better earnings revisions. Already, we think we’ve kind of priced [in] a recession, priced [in] the usual drawdown back in the April lows,” he continued, sounding like a stock market fortune teller. 🔮
“So a better rate of change, better trend on earnings revisions, tailwind from a weaker dollar should help S&P earnings hold up. The Fed’s going to be cutting over the next 12 months. We don’t expect a recession. Usually when that happens, the multiple doesn’t decline. And so that’s why we think the S&P can move up to 6,500 by the middle of next year,” he concluded, probably while wearing a wizard hat. 🎩
As of Tuesday’s close, the S&P 500 is trading at a mere 6,038 points, which is like being on the edge of a cliff, looking down at a trampoline. 🏀
Read More
2025-06-11 23:02