Credit Suisse boosts 2021 S&P 500 price target to 4,200

Discussion in 'Business, Investing & Finance' started by BMF, Jan 7, 2021.

  1. BMF

    BMF Bad Mother....
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    Thoughts on 2021? I can't see how anyone can make a prediction w/ the unknowns of the new administration and the virus still lingering....

    Credit Suisse boosts 2021 S&P 500 price target to 4,200 with more stimulus expected


    Credit Suisse boosts 2021 S&P 500 price target to 4,200 with more stimulus expected

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    Credit Suisse boosts 2021 S&P 500 price target to 4,200 with more stimulus expected
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    Emily McCormick

    ·Reporter
    Thu, January 7, 2021, 10:47 AM EST





    Credit Suisse thinks stocks are heading even higher in 2021 in the wake of the Georgia Senate runoff races, as Wall Street strategists increasingly warm to the prospect of a unified Democratic government.

    The firm raised its price target on the S&P 500 to 4,200 from 4,050 on Thursday, with the revised outlook representing 12.7% upside from closing prices on Wednesday. Credit Suisse now sees S&P 500 aggregate earnings per share growing by 25% over last year to $175 in 2021, up from the $168 seen previously.

    The likelihood of additional, robust fiscal stimulus under a unified Democratic government served as the main catalyst for the more bullish call. The political backdrop, solidified after Democratic candidates won both Senate seats in the Georgia runoff elections this week to give the party a narrow majority in the chamber, is set to generate stronger government support to consumers as they await a broader economic reopening.

    “Democrats picked up both Georgia Senate seats, paving the way for Biden to implement his agenda more broadly,” Credit Suisse strategist Jonathan Golub said in a note Thursday. “This should result in additional stimulus, including the expansion of payments to individuals.”

    Heading into this week’s runoffs, a number of Wall Street strategists had cited the elections and Democratic Senate majority as a risk to markets, given prospects for greater corporate taxes, government spending programs and regulation. Golub, however, suggested these fears were overblown.

    “We do not anticipate more progressive policies on taxes or regulatory issues that might disrupt technology, healthcare, financials, energy or the market more broadly,” he said.

    Instead, he suggested investors would focus on the market-positive likelihood of more fiscal stimulus. In late December, the U.S. House of Representatives voted to increase direct payments to most Americans to $2,000, up from the $600 allocated in Congress’s recent $900 billion virus relief package. Senate Majority Leader Mitch McConnell, however, balked at the measure, and tied a vote on the payments to provisions most senators did not support to effectively block the stimulus increase. Under a Democratic Senate, however, the chamber would more likely take up the measure.

    Additional aid out of Washington would help boost consumer spending and stoke corporate sales and profits while the COVID-19 vaccine rollout trudges along at a weak pace in the U.S., Golub noted.

    “While the timeline for vaccination rollouts has proven underwhelming, the likely avalanche of pent-up consumer demand cannot be ignored,” he added. “Any additional stimulus will further fan these flames.”

    Amid these assumptions, Credit Suisse upgraded pro-cyclicals including the consumer discretionary sector, excluding internet retailers, industrials, materials and energy to Overweight. The firm also downgraded the primary outperformers of 2020 including information technology, communications and internet retail to Market Weight. Financials and health care companies remained the firm’s highest conviction Overweight calls.

     
  2. Concrete Helmet

    Concrete Helmet Hook, Line, and Sinker
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    Every Bank has predicted stellar growth for 2021....financials have been boosted the last week by the uptick in the 10yr....Just have to wait and see I guess.
     
    • bradgator2

      bradgator2 Rioting
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      I pushed some pretty big chips in on some financials in 2020. They were at rock bottom prices.

      So far:
      AXP +31%
      USB +46%
      WFC +48%
      C + 46%

      I also put some bigger chips into several FinTech ETFs:
      FINX +41%
      GIGE +40%
      ARKF +30%
       
    • BMF

      BMF Bad Mother....
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      Nice work.

      The ARK's have done well. I'm in ARKF, W, G, & K.
       
    • bradgator2

      bradgator2 Rioting
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      Yes, me too. ARKF, ARKQ, and ARKG.

      My biggest single holding is in ARKG. Up 7.1% today. Up 66% overall. I'd marry Cathie Wood if I could. Her youtube videos are really freaking good. Search "ARK Invest"
       
      • FireFoley

        FireFoley Senior Member
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        Well obviously these guys are not geniusues. Higher prices beget higher prices. As long as we have Fiscal stimulate me (yes the Dums will add more) and we have monetary Stimulate me, all assets will go up. The key will be to determine when the Fed and/or the Gov't pull the rug out. Some other genius just upgraded JPM today to a buy. Stock closed 130ish. You could have bought all you wanted and then more between 90 and 100 for over 6 months. where were these guys then?
         
      • FireFoley

        FireFoley Senior Member
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        The stellar growth prediction is based entirely on Stimulate Me, not on a self sustaining mechanism. Without Stimulate Me. GDP would be less than ZERO. With Stimulate Me it will be well above 5%. When will the economy be able to stand on its own and what will the total debt be by then and what will the size of the Fed balance sheet be at that time?
         
        • bradgator2

          bradgator2 Rioting
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          After the bottom dropped out of oil last year, I went in
          XOM +25%
          SUN +15%
          SU +14%
          FANG +41%

          I might have gotten a little too confident and went in deep in
          KRP only +3% so far. A little nervous about this one


          Hydrogen Fuel Cells
          I put some beer money in PLUG, it's up +1102%
          So I put in some more and it's up 310%
          I put a good little chunk into BLDP, +63%
           

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