Barclays Raises its Year-End S&P 500 Target to 4,600


Barclays strategists, led by managing director Maneesh Deshpande, have raised their year-end estimate for the S&P 500 to 4,600 from 4,400.

Strong earnings will buoy the market, they said, according to the MarketWatch report.

“Consensus forecasts for future quarters have not been revised up despite the strong earnings surprise for the second quarter, continuing the trend of viewing each beat as a one-off event,” the analysts wrote, according to the MarketWatch report.

The S&P ended the day off 0.4% at 4,59.65. It has climbed 21% year to date.

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The Federal Reserve may start reducing its bond purchases this year, but the analysts don’t think that will hurt stocks. They noted that stocks actually rose after the Fed began curbing its bond buying in December 2013.

So what are the areas of concern for stocks? Lofty valuations and faster-than-expected shrinkage of Fed bond purchases, they said.

Stocks ended mixed Tuesday as investors braced for what is typically the worst month of the year for stocks amid looming uncertainty over the pace of the global recovery and the path of the Federal Reserve's stimulus withdraw.

Last week's softer-than-expected employment report, which showed 235,000 new jobs were created, suggested a more muted pace of recovery over the final months of the year as the impact of government stimulus fades and Delta variant coronavirus infections continue to surge.

Goldman Sachs, in fact, trimmed its 2021 GDP growth forecast by 30 basis points, to 5.7%, in the wake of both the August jobs report and a series of data releases that could suggest slower growth in the months ahead.

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