Evercore Says World-Beating S&P 500 Index Headed for New Highs
(Bloomberg) -- The S&P 500 Index, which has been outperforming equity benchmarks in the rest of the world, remains in an “outstanding position” to continue its run to record highs, according to Evercore ISI’s Rich Ross.
Exchange-traded funds tracking strong-momentum, high-quality and low-volatility stocks all trading at 52-week highs is a “uniquely bullish” combination that bodes well for the U.S. equity market, Ross, the firm’s New York-based head of technical analysis, wrote in a research note Friday. He shaved 10 points off his latest S&P 500 target, setting it at 3,005 in a move he said reflects a “sharpening up” of the short-term forecast.
“The market is in an even stronger position and my conviction in the move is higher,” Ross said by email.
That kind of confidence in the U.S. market’s ability to push higher is becoming rarer on Wall Street these days. Strategists from Goldman Sachs Group Inc. and JPMorgan Chase & Co. are among those who have recently sounded alarms about the risk of a full-blown trade war to stock prices. Hedge funds’ net leverage, a measure of the industry’s risk appetite, has fallen to the lowest level this year.
The S&P 500 was trading at 2,903 Friday afternoon, nearly 10 points from its record high and on pace to post its biggest weekly gain since mid-July. It’s up more than 8 percent this year, while the Stoxx Europe 600 Index fell 2.9 percent and the MSCI Emerging Markets Index entered a bear market.
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