New Stock Record Leaves Consumers Torn Over a Future Rally or a Flop

(Bloomberg) -- With stocks plumbing record highs, U.S. consumers are confused about what will come next.

For the first time since January 2017, fewer Americans expect stock prices to both rise and fall over the next year, according to the latest sentiment reading from the Conference Board. The tandem move is an uncommon occurrence for the data, and the last time the readings moved in the same direction was 21 months ago, when expectations for both measures increased.

They’re not alone with their indecision. The median year-end target of Wall Street strategists tracked by Bloomberg stands at 3,000, just about 1% below where the S&P 500 Index closed on Monday. And the analysts are also split. Of the 21 followed, 10 see the benchmark closing below the round number this year, while 11 see it ending 2019 at or above it.

Who can blame them when much of the outlook depends on the resolution or fallout of geopolitical events and stabilization of economic growth, which is still up for debate? Stocks inched to all-time highs Tuesday on the back of perceived U.S.-China trade and Brexit progress, better-than-feared corporate earnings, and prospects for easier monetary policy. Skepticism abounds over whether it can last.

“It feels like you’re in one of these complacent periods where there’s been just enough good news to break people out of their funk,” said Sameer Samana, senior global market strategist for Wells Fargo Investment Institute. “But a lot of this seems to be more of an interruption in some of these ongoing news headlines, as opposed to a real inflection point.”

For now, some money managers are taking a more neutral stance.

“We always want to make either the bear or the bull case, and where we find ourselves today is in neither camp,” Gabriela Santos, JPMorgan Investment Management’s global markets strategist, said in an interview at Bloomberg’s New York headquarters. “The truth is it’s not recession, it’s also not a massive reflation, it’s just kind of steady, moderate growth, and lower returns with volatility.”

To contact the reporter on this story: Sarah Ponczek in New York at sponczek2@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Rita Nazareth, Dave Liedtka

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