Business

Bought yesterday and walked away? Stifel sees a losing decade for the S&P 500

Businessman lost and confused while walking in the meadow

gremlin

According to Stifel’s stock trading desk, the broader market may recover in the short term, but in the long term it will be virtually unprofitable for equities, according to Stifel’s stock trading desk.

From “S&P 500 January 2021 (SP500) (NYSEARCA:SPY) high (4,800 nominal, 5,100 real), we see a 10-year 2021 P/E halving to 2031E offset by a doubling in EPS over the same period (7.2% CAGR), let the S&P 500 price be flat in 2031 compared to 2021 in real or nominal terms, “strategist Barry B. Bannister wrote in a note.” During this stage Value (IWD) should perform well Grow (IWF) many (but not all) years. “(Emphasis added.)

The “narrative” for this scenario would be if the goods (COMT) (FTGC) is in a ‘secular bull market’ with ~10 year highs/lows. “

But a secular 10-year bear market with range-bound trading in the S&P offers the following opportunities, Bannister said:

  • Active management (not broad passive) for a limited 2020 decade on stocks
  • Sales growth (IWF) after the S&P 500 recovers, accumulates value (IWD) after refusing
  • Protection when slowing down, cyclically during recovery
  • Small limit value (SLYV) (VBR) in temperature recovery, small cap growth (SLYG) (VBK) in sterilization
  • Macro hedge funds, or market-neutral long/short equity funds
  • If the dollar (DXY) (UUP) (U.S. DOLLAR) is weaker, non-US markets place more importance on Value Factor
  • Write covered call option when the index limits the range near the top of the channel
  • Alternative investments (e.g., hard assets, including real estate and CTAs)
  • Focus on cash return with cash return requirements in less time

“The recession is earnings, sales, manufacturing, investment and employment weakening; we don’t see such a classic US recession until ~3Q23E,” Bannister added. “That’s next year’s issue: whether a recession is policy-driven or a shock, the S&P 500 only drops at the onset of a recession.

Morgan Stanley’s Mike Wilson Says Stocks Rebound Now Could See Another 10% from here.



Source by [author_name]

news7h

News7h: Update the world's latest breaking news online of the day, breaking news, politics, society today, international mainstream news .Updated news 24/7: Entertainment, Sports...at the World everyday world. Hot news, images, video clips that are updated quickly and reliably

Related Articles

Back to top button