The U.S. stock market erased all of its 2020 advance amid growing concerns the fast-spreading coronavirus will lead to a global economic fallout, but a slew of Wall Street strategists believe the fears might be overblown.
Analysts from major financial institutions including Morgan Stanley, JPMorgan, UBS and Credit Suisse are all sticking with their bullish year-end targets for the S&P 500, seeing the Chinese virus as a short-term risk rather than a threat to derail the record-long bull market.
“The fundamental backdrop is supportive, in our view, and the fallout from the outbreak is unlikely to hurt [economic] activity prints over the medium term,” Mislav Matejka, JPMorgan’s head of global and European equity strategy, said in a note Monday. “Our call remains that one should not expect a US recession ahead of presidential elections.”
“The virus development should not derail the recovery,” Mike Wilson, Morgan Stanley’s head of U.S. equity strategy, said in a note Monday. “We continue to think this correction will be contained to 5% in the S&P 500...There is strong support at 3100 on the S&P 500 both technically and from a valuation standpoint.”
Wall Street has an average year-end target of 3,356 on the S&P 500, which represents a 4% gain from Friday’s close of 3,225.52, according to CNBC market strategist survey.
Reference: CNBC
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