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Third time lucky? Citi changes its S&P target once more after index hits 6,000.
Third time lucky? Citi changes its S&P target once more after index hits 6,000.

Yahoo

time4 hours ago

  • Business
  • Yahoo

Third time lucky? Citi changes its S&P target once more after index hits 6,000.

It was by just a fraction, but the S&P 500 closed last week above the 6,000 mark again. Another 2.4% advance and the Wall Street benchmark will be back in record territory. Unsurprisingly, the stock market's 20.4% surge off the mid-April low has left a succession of analysts executing some swift U-turns. S&P 500 SPX targets for 2025 from early in the year were slashed several weeks ago and are now being pushed up again. Fund manager who sold Tesla, just in time, says investors are overlooking these tech bargains 'I prepaid our mom's rent for a year': My sister is a millionaire and never helps our mother. How do I cut her out of her will? A local restaurant has a 5% container charge and 3% kitchen-service fee. Is this as nuts as it sounds? 'The situation is extreme': I'm 65 and leaving my estate to only one grandchild. Can the others contest my will? I bought my mother-in-law a condo — and she took out a $30,000 car loan. Now she refuses to get a roommate. Scott Chronert and the team at Citigroup are the latest to turn more bullish. At one point they had an end-of-2025 S&P 500 target of 6,500. That was cut to 5,800 on concerns trade tensions would damage growth. In a new note published late Friday, they argue for 6,300. That 5% upside from here recognizes the danger of policy shocks, but assumes the market will continue to accept that the worst of the tariff angst is in the rear view mirror, as trade deals are stuck and some White House actions are curtailed by the courts. 'Trading moves aside, we expect investors will tend to look through shorter term policy noise in aggregate,' says the Citi team. 'Consensus GDP growth expectations for next year have also bottomed, moving higher in recent weeks as the out-year labor market outlook also improves on the margin.' The less bad economic backdrop allows Citi to raise its full year S&P 500 earnings per share to $261 from the previous $255, though that's below the $270 they were forecasting heading into this year. And better sentiment amid less perceived risk will allow the S&P 500 to maintain a price-to-earnings multiple of 21, helped by corporations adapting to the uncertain policy environment, Citi reckons. 'Longer term, existing and future…technology enhancements should lessen historic earnings sensitivity to business/economic cycles, thus supporting higher multiples relative to history,' says the bank. Such a valuation will be supported by two factors in particular. First, Citi thinks the AI trade is regaining momentum and that this will be reflected in sturdy aggregate capital expenditure. '[P]ersistence of capex spending intentions has mostly held thus far this year, despite the policy uncertainty. This provides some comfort to structural fundamental growth expectations,' says Citi. Next are buybacks, which according to Citi have increased on a net basis, and which may come to an aggregate $1 trillion this year. 'This aligns with a call we made earlier in the year that equity market volatility around policy concerns and investment spending question marks could translate into an increase in aggregate and net buyback activity,' they say. The Citi team argue that their price target vacillations reflect 'the volatility path that has come with Trump administration policy uncertainty,' but they believe that analysts, companies and investors alike are becoming more used to this. 'With some experience behind, we are comfortable that fundamental volatility will be less than policy volatility,' they say. 'As we turn to the second half, '26 earnings improvement on the other side of '25 policy implications on fundamentals will be a key determinant. We allow for mid single digit 2H [second half 2025] gains from here, implying an ongoing mantra to buy pullbacks more so than chasing rallies,' Citi concludes. Their S&P 500 target for mid 2026 is 6,500. U.S. stock-indices SPX DJIA COMP are mixed shortly after the opening bell as benchmark Treasury yields BX:TMUBMUSD10Y dip. The dollar index DXY is lower, while gold GC00 is trading around $3,314 an ounce. Key asset performance Last 5d 1m YTD 1y S&P 500 6000.36 1.50% 6.02% 2.02% 12.22% Nasdaq Composite 19,529.95 2.18% 8.93% 1.13% 13.99% 10-year Treasury 4.482 3.20 0.80 -9.40 1.60 Gold 3338.5 -1.99% 2.98% 26.49% 43.41% Oil 64.62 2.51% 4.29% -10.09% -17.40% Data: MarketWatch. Treasury yields change expressed in basis points Need to Know starts early and is updated until the opening bell, but to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern. U.S. economic data due Monday include wholesale inventories for April, released at 10:00 a.m. Apple AAPL begins its World Wide Developers Conference at its Cupertino headquarters. Tesla shares TSLA are lower. Baird analysts cut the EV maker to neutral, citing concerns over robotaxis and Chief Executive Elon Musk's political ties. Qualcomm QCOM is paying $2.4 billion to acquire Britain's Alphawave IP UK:AWE. Robinhood Markets shares HOOD are down 5% after the trading portal failed to be included in the S&P 500. The U.S. and China will hold trade talks in London on Monday. China's May exports to the U.S. fell by the most since 2020. A separate report showed China's consumer prices fell 0.1% over the 12 months to May, the fourth consecutive month of deflation. The Federal Reserve is now in its blackout period ahead of the two day policy meeting starting on June 17. The Pentagon disinformation that fueled America's UFO mythology. A lesson from Trump's big bill. If you want power, turn every page. A professor testing ChatGPT's, DeepSeek's and Grok's stock-picking skills suggests stockbrokers should worry. It is generally the case that the correlation between stocks increases at times of market stress— for example when a negative event is seen impacting the overall economy — and decreases when investors are more relaxed. But it's unusual to see such a divergence between realized correlation and implied correlation, as is the case now. 'This disparity suggests that the market anticipates a significant decline in correlations,' says Michael Kramer of Mott Capital management. 'However, the actual trend suggests otherwise, as the realized correlation continues to rise, implying correlations are not only elevated, but still strengthening. It suggests there's a high degree of complacency in the market,' Kramer says. Here were the most active stock-market tickers on MarketWatch as of 6 a.m. Eastern. Ticker Security name TSLA Tesla NVDA Nvidia GME GameStop PLTR Palantir Technologies AAPL Apple AMZN TSM Taiwan Semiconductor Manufacturing RKLB Rocket Lab AMD Advanced Micro Devices MLGO MicroAlgo Cow fails in great escape attempt. What's the point? Minneapolis sharpens 20-foot-tall pencil. For when great sarcastic sympathy is required, scientists create world's smallest violin. For more market updates plus actionable trade ideas for stocks, options and crypto, . Risky stocks and safe-haven gold are both aiming for records. Who will blink first? I have $1,000 in credit-card debt. Will I be able to hide my inheritance from the bank? 'He failed in his fiduciary duty': My brother liquidated our mother's 401(k) for her nursing home. He claimed the rest. I help my elderly mother every day and drive her to appointments. Can I recoup my costs from her estate? My son, 39, will be released from prison in 2030. Do I leave him my $100K life insurance? 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Citigroup joins chorus of Wall Street banks and hikes S&P 500 target
Citigroup joins chorus of Wall Street banks and hikes S&P 500 target

CNBC

time2 days ago

  • Business
  • CNBC

Citigroup joins chorus of Wall Street banks and hikes S&P 500 target

And Citigroup makes five in just one week. Citigroup raised its year-end S & P 500 target nearly 9%, to 6,300 from 5,800, implying that the market can rise another 5% from current levels. Strategist Scott Chronert noted that while "high policy volatility is likely to continue," market fundamentals appear to be solid. "No doubt, policy volatility is likely to persist as are numerous other risks. This keeps us reticent to chase rallies but more inclined to buy pullbacks," he said. "What the first half has told us is that fundamental volatility may be more manageable as tariffs, taxes, budget/deficit, rates, currency, geopolitics, etc. will all continue to remain in the financial news headlines." With this change, Chronert became the fifth sell-side strategist tracked by CNBC Pro to increase his 2025 S & P 500 forecast. Here are the other four target hikes in the past week. Lori Calvasina of RBC : to 5,730 from 5,550 Binky Chadha of Deutsche Bank : to 6,550 from 6,150 Venu Krishna of Barclays : to 6,050 from 5,900 Dubravko Lakos-Bujas of JPMorgan : to 6,000 from 5,200 Those changes come as the Street grows less worried about rising trade tensions between the U.S. and other countries. On Monday, U.S. and Chinese officials were in London to discuss tariffs. "There will likely be posturing for threats of higher tariff rates on a country by country basis, as well as additional sectoral tariffs put in place, but we do not think this will produce the same shock/surprise that set off the April drawdown," Citi's Chronert wrote. "We saw evidence of this dynamic [last week] with no market reaction to steel and aluminum sectoral tariff rates being raised from 25% to 50%." "Trading moves aside, we expect investors will tend to look through shorter term policy noise in aggregate," he added.

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