Profit Gains Give Stock Rally More Fuel, Wells Fargo’s Han Says
(Bloomberg) -- Third-quarter earnings reports are signaling the stock market rally has life left, says Wells Fargo’ Anna Han.
In an interview on Bloomberg TV’s Surveillance on Tuesday, Han stuck to a forecast for the S&P 500 Index reaching 4,825 by year-end, about a 4% increase from the previous close, before slipping to about 4,700 in 2022.
“What is really giving us confidence for our price targets the next few months, look at how third-quarter earnings have been coming in,” she said. “As much as we all hear about supply chain issues, labor costs going up, labor shortages -- margins have been growing overall for the S&P 500 companies.”
Han subscribes to the view that powerful demand from consumers is keeping earnings growth “robust,” which is “helping us and our prospects going into yearend.”
To be sure, the imminent start of the tapering of asset purchases by the Federal Reserve, followed by higher rates in the future, could slow the market next year.
But, Han said, “this is the most monetary liquidity we’ve had in quite some time, and don’t forget, we’ve had a lot of fiscal stimulus down the pipeline as well, perhaps more coming. It is helping people and giving us that flexibility to spend and to move markets around.”
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