Latest news with #BankimChadha
CNBC
3 days ago
- Business
- CNBC
Deutsche Bank's Bankim Chadha: Here's why the market rally is sustainable
Bankim Chadha, Deutsche Bank chief U.S. equity strategist, joins CNBC's 'Money Movers' to discuss market outlooks.
Yahoo
26-04-2025
- Business
- Yahoo
9 ways tariffs could upend stocks' fundamental story: Chart of the Week
At this point, it's no secret that tariffs are the leading driver of the stock market narrative. Or, rather, tariffs and their announcements, rumors, and responses. Any incremental news on tariffs being softer than previously thought has sent stocks higher over the past week. Any signs that the trade war could be escalating have led to more selling. Recent research from Deutsche Bank chief global strategist Bankim Chadha helps us understand why. On Wednesday night, Chadha — one of the biggest bulls on Wall Street entering 2025 — slashed his year-end S&P 500 forecast to 6,150 from a prior target of 7,000. This call included a detailed look at why the firm now sees S&P 500 earnings per share hitting $240 this year instead of $282. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Chadha listed nine different headwinds weighing on his S&P 500 earnings forecast. Given the escalation of the trade war, exports and imports with China are expected to weigh on profits. Lower oil prices will hurt profits in the energy sector. As tariffs push increased prices on consumers, many expect slowing economic growth. That will bring lower-volume growth for corporates and a hit to earnings. The same could be said for how persistent uncertainty is expected to weigh on growth. Our Chart of the Week has them all. The pressing issue for investors has been that any one of the headwinds seen in the chart above could materially change at any moment. As Chadha put it, there is "significant uncertainty about the precise magnitudes" by which the headwinds he identified impact earnings growth. Even the uncertainty has uncertainty. Of course, outlooks are always uncertain. But this time really is a bit different as the whole thing could change with a post on Truth Social. For instance, the 145% tariff rate is expected to fall. Perhaps in a range of 50% to 65%, as the Wall Street Journal reported. It could be higher. It could be lower. Wherever it lands will have a significant impact on operating costs for companies heavily exposed to China. And likely a significant one on companies that do business with companies that are heavily exposed to China. And given that earnings are arguably the most important driver of stock prices, this has created a conundrum for markets: How do you accurately price out what a given stock, or the market as a whole, should be worth if the path for earnings is full of so many variables? The market's wild swings of late show the difficulty of answering this question in real time. But for the current market rally to be sustained, strategists like Chadha continue to argue that dialed-back tariffs are a key part of the bull case for stocks. "Our base case remains for a significant rally on a credible relent on trade policies, with a target of 6150 by year end," Chadha wrote. "The risk to our view is we don't get a relent before the nonlinearities of recession kick in." Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer. Click here for in-depth analysis of the latest stock market news and events moving stock prices Sign in to access your portfolio
Yahoo
26-04-2025
- Business
- Yahoo
9 ways tariffs could upend stocks' fundamental story: Chart of the Week
At this point, it's no secret that tariffs are the leading driver of the stock market narrative. Or, rather, tariffs and their announcements, rumors, and responses. Any incremental news on tariffs being softer than previously thought has sent stocks higher over the past week. Any signs that the trade war could be escalating have led to more selling. Recent research from Deutsche Bank chief global strategist Bankim Chadha helps us understand why. On Wednesday night, Chadha — one of the biggest bulls on Wall Street entering 2025 — slashed his year-end S&P 500 forecast to 6,150 from a prior target of 7,000. This call included a detailed look at why the firm now sees S&P 500 earnings per share hitting $240 this year instead of $282. By subscribing, you are agreeing to Yahoo's Terms and Privacy Policy Chadha listed nine different headwinds weighing on his S&P 500 earnings forecast. Given the escalation of the trade war, exports and imports with China are expected to weigh on profits. Lower oil prices will hurt profits in the energy sector. As tariffs push increased prices on consumers, many expect slowing economic growth. That will bring lower-volume growth for corporates and a hit to earnings. The same could be said for how persistent uncertainty is expected to weigh on growth. Our Chart of the Week has them all. The pressing issue for investors has been that any one of the headwinds seen in the chart above could materially change at any moment. As Chadha put it, there is "significant uncertainty about the precise magnitudes" by which the headwinds he identified impact earnings growth. Even the uncertainty has uncertainty. Of course, outlooks are always uncertain. But this time really is a bit different as the whole thing could change with a post on Truth Social. For instance, the 145% tariff rate is expected to fall. Perhaps in a range of 50% to 65%, as the Wall Street Journal reported. It could be higher. It could be lower. Wherever it lands will have a significant impact on operating costs for companies heavily exposed to China. And likely a significant one on companies that do business with companies that are heavily exposed to China. And given that earnings are arguably the most important driver of stock prices, this has created a conundrum for markets: How do you accurately price out what a given stock, or the market as a whole, should be worth if the path for earnings is full of so many variables? The market's wild swings of late show the difficulty of answering this question in real time. But for the current market rally to be sustained, strategists like Chadha continue to argue that dialed-back tariffs are a key part of the bull case for stocks. "Our base case remains for a significant rally on a credible relent on trade policies, with a target of 6150 by year end," Chadha wrote. "The risk to our view is we don't get a relent before the nonlinearities of recession kick in." Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer. Click here for in-depth analysis of the latest stock market news and events moving stock prices
Bloomberg
24-04-2025
- Business
- Bloomberg
One of Wall Street's Biggest Bulls Slashes View as Tariffs Bite
One of Wall Street's biggest bulls is throwing in the towel on expectations for large gains this year, seeing tariffs hitting corporate America the hardest. Deutsche Bank AG strategists led by Bankim Chadha slashed their year-end S&P 500 target by 12% to 6,150. While that leaves 14% upside from Wednesday's close, it means the index will only recover losses sustained since its February peak. Up until this change, they had held one of the most bullish views for the benchmark.
Yahoo
22-03-2025
- Business
- Yahoo
Wall Street's S&P 500 forecast range is widening: Chart of the Week
Three Wall Street strategy teams have cut their S&P 500 (^GSPC) outlooks amid the recent market drawdown in markets. The calls all have a similar flavor. Economic growth forecasts have been falling as the uncertainty around President Trump's policy plans wears on. This comes counter to the environment many expected when consensus projected another year of strong economic growth for the US economy. At a high level, there's also been a sentiment shift, with strategists now arguing that markets might no longer trade at the extended valuations seen over the past two years, and therefore the benchmark S&P 500 likely won't rise as much. There's also the simple fact that any rally in stocks is coming from a lower starting point and therefore might not see the massive rise required to reach prior targets. Still, 16 of the 17 strategists we track at Yahoo Finance forecast the benchmark index rallying from here. What stands out now, as the chart below shows, is that there's not much of a clear consensus besides a general idea that stocks will go up at least somewhat. With an upside range as low as 6,200 and as high as 7,100, forecasters are calling for the S&P 500 to rally anywhere from about 10% to more than 26%. Broadly, strategists feel the current hesitancy in the stock market will continue until there's more clarity on President Trump's policies. The extent to which stocks rally from there likely depends on the outlook for the economy and corporate profits. Deutsche Bank chief strategist Bankim Chadha wrote in a recent research note that if the souring mood about the president's tariff plans prompts a "credible plan to resolve tariff uncertainty, it will allow the business cycle to continue." If so, Chadha believes the S&P 500 could hit 7,000 this year. Meanwhile, other strategists are starting to talk more about how the path ahead might not be so linear. "While we don't believe that a pullback beyond the 10% drawdown that has already been sustained is inevitable, we do believe that the path for stocks between now and December has gotten rockier with stronger headwinds," RBC Capital Markets' Lori Calvasina wrote in a recent note when lowering her year-end S&P 500 target to 6,200 from 6,600. Last week, Citi equity strategist Scott Chronert told us about a "sentiment shift" among investors over the past few months as more of their clients have been asking about the chances the S&P 500 hits their "bear case" of 5,500. This is a stark change from the past two years when the prevailing question was whether or not strategists had been bullish enough. Given the recent drawdown, the question makes sense. Stifel's Barry Bannister is standing by his 5,500 year-end target for the index, the most bearish call on Wall Street entering the year. Bannister believes stocks will stay in the doldrums amid a period of slower economic growth and sticky inflation, which he notes is "historically adverse for the broad equity market." For what it's worth, that kind of environment could be an interpretation of the Fed's most recent economic forecasts released on Wednesday, which showed the central bank revising inflation projections higher for this year while cutting its economic growth forecast. RBC's Calvasina often calls her S&P 500 target a "compass, not a GPS," an idea this column has highlighted before. For now, the arrow is clearly pointed in one direction, with the majority of macro strategists arguing stocks will head higher at some point in 2025. But it's hard not to acknowledge the needle on the compass might be wavering a bit, and the argument for where stocks are headed has become far more nuanced — and with less conviction — than the straight line higher of the S&P 500's past two years. Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer. Click here for in-depth analysis of the latest stock market news and events moving stock prices
