Stimulus and markets: Wall Street stock surge as some point to rough time ahead
Some of Wall Street’s biggest names are predicting a pause in a rally that has taken the S&P 500 to fresh records this year, leaving investors trying to determine whether to lock in some of the breathtaking gains or stay the course, Reuters reports.
Among the most recent has been Goldman Sachs, whose analysts on Wednesday said an expected second-quarter peak in US growth could be tied to weaker stock returns. Morgan Stanley earlier this week warned stocks would soon face headwinds. Deutsche Bank this month called for a pullback of as much as 10% in the S&P 500 as growth decelerates, and BofA Global Research backed a year-end target for the index about 8% below current levels.
A comparatively long period without a serious drop in stocks has also made some investors uneasy. The S&P 500 has declined at least 5% every 177 calendar days, according to Sam Stovall, chief investment strategist at CFRA. The latest market advance has lasted 211 days without such a drop.
“I wouldn’t be surprised to see some kind of pullback for no particular reason other than people start to think maybe this is a little bit ahead of itself,” said Robert Pavlik, senior portfolio manager at Dakota Wealth.
The flurry of warnings present a conundrum for some investors. While many would like to protect profits from the market’s 85% run since last year’s pandemic low, pullbacks over the past year have been difficult to time…
