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CNBC
8 hours ago
- Business
- CNBC
Wells Fargo hikes S&P 500 target as U.S. tariffs get delayed again
The U.S. pushing back many of the tariffs announced earlier this year will help Wall Street through the end of the year, according to Wells Fargo. The bank's Investment Institute raised its year-end S & P 500 target range to 6,300-6,500 — putting the midpoint at 6,400. Strategist Darrell Cronk previously expected the benchmark to end 2025 between 5,900 and 6,100. "We believe delayed tariff increases will mitigate this year's U.S. economic growth slowdown and extend the soft patch into early 2026. This should dilute positive impacts from frontloaded tax cuts and deregulation during the first part of next year. We think the protracted tariff implementation will mute and defer the brunt of tariff-related price pressures until later this year and into early 2026," Wells said in a note to clients Friday. President Donald Trump in April unveiled steep charges on imported goods arriving from other countries, but soon after pushed back the implementation of those duties. That helped the S & P 500 recover from a sharp sell-off that nearly tipped the benchmark into a bear market. The index last week hit a fresh record high of 6,481.34. .SPX YTD mountain SPX year to date "Extending tariff implementation over a longer period coupled with the passage of the tax provisions in the [One Big Beautiful Bill] has improved investor sentiment and our forecast for equity earnings and returns," Wells Fargo said. Not everyone is as sanguine on stocks right now. Evercore ISI's Julian Emanuel who, at 5,600, has the lowest S & P target in CNBC's Market Strategist Survey , thinks the benchmark could pull back by anywhere from 7% to 15% from current levels. He said Federal Reserve Chair Jerome Powell's speech this coming Friday at the Jackson Hole symposium could send the market lower if investors leave with less confidence toward central bank rate cuts. "Powell on 8/22 is likely to indirectly signal a 25bp rate cut on 9/17/25 – stressing 50bp is not an option absent Labor market deterioration, and Oct and/or Dec cuts will be 'data dependent.' For a market that was eager to embrace '50 in Sept,' a balanced view could catalyze a near term -7% to -15% pullback into October, within the context of the Structural AI Driven Bull Market," Emanuel said in his weekly note to clients. UBS' wealth management arm also sees potential for "near-term volatility" with the market at current price levels. "Equity valuations are now elevated after a substantial rally in recent months," head of U.S. equities David Lefkowitz wrote. "The economic impact of U.S. tariffs is currently feeding through, with the labor market weakening and inflation rising. Uncertainty remains—regarding the scale, distribution and second-order effects." Still, Lefkowitz expects stocks to be higher a year from now.
Yahoo
05-08-2025
- Business
- Yahoo
Wells Fargo downgrades US small-cap equities to 'unfavourable'
(Reuters) -Wells Fargo Investment Institute on Tuesday downgraded U.S. small-cap equities to "unfavorable" from "neutral", pointing to its heavy tariff exposure and weak earnings.
Reuters
05-08-2025
- Business
- Reuters
Wells Fargo downgrades US small-cap equities to 'unfavourable'
Aug 5 (Reuters) - Wells Fargo Investment Institute on Tuesday downgraded U.S. small-cap equities to "unfavorable" from "neutral", pointing to its heavy tariff exposure and weak earnings.
Bloomberg
02-07-2025
- Business
- Bloomberg
In ‘Risk-On' Markets, BlackRock Favors US Stocks Over Europe
Don't write off the notion of 'America Exceptionalism' just yet, as the US stock market is the best place to be with equities roaring higher, according to the BlackRock Investment Institute. US stocks' underperformance this year relative to their European peers is unlikely to last because American companies will deliver stronger earnings thanks to the adoption of and investment in artificial intelligence, Wei Li, global chief investment strategist at the unit of the world's biggest asset manager, said Wednesday at a briefing.
Yahoo
17-06-2025
- Business
- Yahoo
Why investors should avoid 'over-risking' in equities right now
Wells Fargo's (WFC) Investment Institute released its 2025 mid-year outlook last week, offering insights for investors. Veronica Willis, Wells Fargo Investment Institute global investment strategist, joins Morning Brief to explain the report's findings, why investors should stay positioned in small-cap and mid-cap equities, and where she's seeing opportunity. To watch more expert insights and analysis on the latest market action, check out more Morning Brief here. It is time now for today's strategy session. Wells Fargo's Investment Institute, releasing its 2025 mid-year outlook with insight and guidance for investors, joining me now, we've got Veronica Willis. Wells Fargo Investment Institute, Global Investment Strategist, Veronica, great to see you, thanks so much for hopping on after the opening bell, walk us through some of the key takeaways from that report. Yeah, absolutely. One major key takeaway in our outlook is that through 2026 we're expecting stock market um to move higher. There's going to be some volatility this year. There are a lot of economic, geopolitical and policy uncertainties that are going to contribute to some market volatility this year. We think through 2026 as the economy growth reaccelerates, we are going to see those higher stock prices and so we're really focused on keeping investors invested in the market at this point. And so with that in mind, one of the notes that I was looking at is your views and how you're evaluating this entire outlook, uh across periods of volatility that are being expected here. You mentioned within this outlook, viewing further periods of volatility as an opportunity to lean into equities, to position for the gains that you expect through 2026. What does that mean in terms of an asset class that you would be looking to and and kind of over indexing towards? That's right. So we want to be selective in that equity space and we're focusing on quality. So we like the large cap and the mid cap space over small caps, and we like developed markets over emerging markets. So thinking about moving a little bit up in quality, not over risking within the equity space. So on those down days when the market pulls back, that's where we want to add exposure, the US um large cap space and the mid cap space. And then if you're underweight any in an international space, adding to developed over adding to emerging markets. You know, we had one of our guests earlier um from Ritholtz Wealth uh Kelly Cox who had said that a lot of executives may not need to actually come out swinging and say, hey, everything is now fine, when in fact, everything is not very much fine. Tariff trouble, as you know, within your own outlook as well, that's still going to persist. And so with that persistence, what is the likelihood that in this next earnings season to begin in a couple weeks, that we actually have even more or any type of clarity from and a C-suite across corporate America that is trying to best figure out, okay, how long could this linger and be a headwind to our own results? Yeah, I think we're likely to see another earnings quarter where, you know, companies are reiterating caution or a lot of uncertainty still related to tariffs. I think with the rebounds from the April lows with the market, we might have been lulled into a false sense of security around the tariffs, but the fact remains that a lot of things are still unsettled. We've got that, you know, mid-July deadline for, you know, reimplementation of some tariffs. Potentially we might see some trade deals between now and then, but uh the fact remains that that's still an uncertainty. And so we could at the start of this, you know, Q2 earnings season, start to see some companies still a little bit uncertain, not quite knowing what to do with forward guidance. And so as I'm looking through some of the top five things that you're looking for in top five portfolio ideas for the balance of 2025, one of the things that jumped out to me was how you're looking across some of not just the policy uncertainty, but then also trying to figure out where within this diversification strategy, investors could potentially see some outperformance. And we had actually a viewer that commented to one of our conversations last week on Twitter saying, where have there been surprising elements of resilience even in the diversification strategy right now? Where have you been seeing that? Yeah, I think what we've been seeing is a bit of strength in the international space. So so far this year, developed markets, XUS, equities have really picked up the slack where other um equity markets have, you know, disappointed. We haven't fully recovered from that pullback in the US markets and so had you had that developed market exposure as a part of a globally diversified allocation, would have helped a lot during that pullback that we saw earlier this year. We are continuing to expect some volatility that's going to be pretty much US-centric, and so continuing to have that developed market exposure is a good idea for this year. And what do you expect of the long tail of the generative AI trade to look like in all of that? Yeah, we think with AI, it's been thought of as only a tech story, but we think that there are some other sectors that are really going to benefit from the um AI space. So communication services in particular, industrials and energy, we think are all other sectors that are going to benefit really well. Those companies are going to be able to, you know, utilize AI or they're, you know, a part of the supply chain for providing the energy necessary for generative AI. And so we think, you know, don't just focus on the tech sector, which we are still favorable on, but broadening that out into some of these other sectors is going to be a really good way to play the AI trade. Veronica, always great to grab some time and insights from you. Thank you. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
