The bull market is coming and everything will only grow by the end of the year. What leads a top economist to make such…

The current market situation is such that no one really knows anything. Even the largest US banks and financial institutions do not agree on their estimates. Not at all. Some of them are extremely bearish, some remain relatively neutral and some are strongly bullish. Among these bullish positivists are Fundstrat, BMO and especially JPMorgan, which, led by its top economist, sees the S&P 500 at $4800 by the end of the year!

According to JPMorgan, everything will only go up by the end of the year.

Since the end of June, the S&P 500 is up almost 10%. And according to JPMorgan, there's still more growth to come.

Wall Street's most vocal financial name and their analysts reiterated their year-end S&P 500 target of 4,800 points. With the index currently at roughly 3,900, JPMorgan' s $JPM+0.2% target implies a potential upside of just under 20%.

That wouldn't sound so unrealistic. the problem is that most of their Wall Street peers remain plus or minus neutral with their forecasts, or are instead hard bearish. See this nice picture👇 , which summarizes and summarizes the predictions of the largest financial institutions and their target prices.

Predictions of the index value of the most resounding names. Source

JPMorgan, led by Chief Economist Bruce Kasman, notes several significant phenomena. For example, the fact that a significant amount of money is flowing into the market from investors.

"In addition to buybacks, these investors may provide a steady inflow of several billion a day into equities over the next 2-3 months," says Marko Kolanovic, chief global markets strategist at JPMorgan, in a note to investors.

The S&P 500 index has largely traded below its 200-day moving average in recent months. Kolanovic even ventures to call out specific figures. He says that if the index manages to break above that 200-day moving average, it could lead to roughly $100 billion in investment inflows. Well... a bold and interesting claim. Nice it would be, no question.

However, given the developments of the last 2-3 days, it looks like this is receding. Or at least that we'll have to wait a while.

Kolanovic also weighed in on the Fed. He doesn't believe the central bank's hawkish stance will persist.

He says we are once again deviating from the plan and saying that inflation will resolve itself. He also writes that JPMorgan thinks that by raising it by 75 basis points, the Fed has overreached unnecessarily. On the other hand, they say it could have a positive impact on certain parts of the market.

"This Fed overreaction and the subsequent but largely unrelated decline in inflation will likely result in a Fed reversal, which is positive for cyclical assets. "

Although JPMorgan has a bullish price target for the S&P 500, it does not recommend simply buying the index as a whole.

JPM does not recommend buying the index as a whole

Kolanovic also doesn't recommend chasing large cap technology stocks or recession-proof stocks that are already trading near all-time highs again. He may be right about that, but that will eliminate most potential investments.

The opportunities he sees are based on valuations.

"There are market segments, such as energy, that trade at mid-single digit P/Es, and even some broad markets, such as the S&P 600 small cap index, that trade at recession-level multiples," he writes.

But it's hard to know if he's right. Indeed, much of Wall Street argues that the market will move in the exact opposite direction to what JPMorgan thinks. Take, for example, the likes of BofA.

Bank of America has largely lowered its 2022 target for the S&P 500 index from 4,500 to 3,600.
The new year-end target is the lowest on Wall Street, as the bank itself has stated. BofA expects a mild recession in the U.S. starting in the second half of 2022. So far, they're not quite getting it right. But anything can still happen.

"We found 11 indicators that have historically occurred before the market bottomed, one of which is the Fed rate cut, which has always occurred before the bull market began," Savita Subramanian wrote.

Well their economists expect the Fed to cut rates for the first time in Q3 FY23. So it's clear that their view is the exact opposite of JPMorgan's.

Who do you think is right? Will we see a rise to 4800 by the end as JPMorgan says, or a fall in the BofA scenario? Or will we stay roughly at current levels (which, by the way, several other major Wall Street institutions also think)?

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Disclaimer: This is in no way an investment recommendation. This is purely my summary and analysis based on data from the internet and a few other analyses. Investing in the financial markets is risky and everyone should invest based on their own decisions. I am just an amateur sharing my opinions.

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