With stocks at all-time highs, one of Wall Street’s biggest bulls is taking his optimism up a notch.
Federated Hermes’ Phil Orlando believes the S&P 500 could hit his year-end price target of 4,500 by July, which implies about an 8% gain from current levels.
“At the pace the economy is growing and earnings are growing, you know we might get there earlier,” the firm’s chief equity market strategist told CNBC’s “Trading Nation” on Friday.
Last week, Orlando’s firm upgraded its GDP forecast to 6.4% for the year, citing the positive impact stemming from President Joe Biden’s $1.9 trillion coronavirus aid package. Federated came into the year with a 6.1% forecast.
“If we’re right with our 6.4% estimate, that’s going to be the strongest full-year GDP growth since 1984. We posted a 7.2% rate,” said Orlando.
The upgrade comes as earnings season kicks into high gear. So far, Orlando likes what he sees.
“First quarter earnings are coming in very strong. Looks like we could be up 30% year over year. The earnings recession is over,” said Orlando. “In the second quarter, which will enjoy the full benefit of some of this fiscal stimulus, we could be looking at an earnings growth rate twice that on a year over year basis.”
If inflation proves to be lasting, he wonders if the Federal Reserve will adjust its easy money policy as 2021 progresses.
· Stock futures mixed after Dow, S&P 500 close at record highs
U.S. stock index futures were mixed in early morning trading on Monday, after the S&P 500 and Dow Jones Industrial Average closed at record highs on Friday.
Futures contracts tied to the Dow slid 80 points while S&P 500 futures traded below the flatline. Nasdaq 100 futures, on the other hand, traded in mildly positive territory.
· Asian stocks hit one-month highs, Bitcoin climbs
Asian shares hit a one-month high on Monday helped by expectations monetary policy will remain accommodative the world over, while COVID-19 vaccine rollouts help ease fears of another dangerous wave of coronavirus infections.
Indicators were positive for Europe as well with futures for Eurostoxx 50 up 0.2% and Germany's DAX adding 0.1% though those for London's FTSE were barely changed.
MSCI's broadest index of Asia-Pacific shares outside Japan went as high as 699.70, a level not seen since March 18. It was last up 0.1% at 696.46.
The index jumped 1.2% last week and is up 5.1% so far this year, on track for its third straight yearly gain.
Australian shares finished unchanged from Friday's close while New Zealand's benchmark index gained 0.6% and South Korea's KOSPI added 0.1%. Japan's Nikkei turned around its losses to end flat.
· Japan's Topix ends lower as COVID-19 fears outweigh gains in chip-related shares
Japan’s Topix changed course to close lower on Monday, while the Nikkei ended little changed, as concerns around a resurgence of COVID-19 outweighed gains from chip-related shares.
The broader Topix slipped 0.22% to close at 1,956.56, while the Nikkei 225 Index trimmed gains to end 0.01% higher at 29,685.37.
Japan and the United States agreed last week to cooperate on investment in semiconductor supply chains in response to a global shortage of chips, which is seen as positive for Japanese chemical and industrial companies, analysts said.
· New energy vehicles, foreign inflows drive China stocks to end higher
China stocks ended higher, with the blue-chip index posting its best day in six weeks, led by gains in new energy vehicles firms, while strong foreign inflows also helped sentiment.
The blue-chip CSI300 index rose 2.4% to 5,087.02 on Monday, posting its best session since March 11, while the Shanghai Composite Index climbed 1.5% to 3,477.55.
Leading the gains on Monday, the CSI new energy vehicles index surged 6.3% after Huawei’s launch of automated-driving solutions on Sunday.
Trip.com Group shares gain 4.5% in Hong Kong debut
· European markets inch mostly higher to start the trading week
The pan-European Stoxx 600 added 0.15% at the start of trading, with travel and leisure stocks climbing 0.6% to lead gains while the oil and gas sector slid 0.3%
The positive start expected for European markets bucks a more mixed trend in other global markets overnight; U.S. stock index futures were mixed in early morning trading on Monday, after the S&P 500 and Dow Jones Industrial Average closed at record highs on Friday.
Reference: CNBC, Reuters
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