Wall Street’s biggest bull is sticking to his stock-market optimism, even as concerns mount that corporations will eventually buckle under the pressure of higher interest rates.
(Bloomberg) — Wall Street’s biggest bull is sticking to his stock-market optimism, even as concerns mount that corporations will eventually buckle under the pressure of higher interest rates.
“We do think that things are actually getting better even though interest rates are higher,” John Stoltzfus, the chief investment strategist at Oppenheimer & Co. said on Bloomberg TV Friday.
Stocks have whipsawed in recent weeks amid expectations the Federal Reserve will keep interest rates higher for longer. Although Treasuries rallied Friday amid mounting geopolitical tensions, bond yields are still hovering near multi-decade highs.
For Stoltzfus, higher rates are not a major problem for stocks as long as they move in a smaller range. A Bank of America index of interest rate volatility is at the lowest level since September.
“We’re beginning to see the bonds really trade in a range, from a relative low to a relative high. The bond market is looking ahead and figuring out the Fed indeed is getting it right, even though it’s not infallible,” he said.
Stoltzfus has the highest S&P 500 price target out of all of the equity analysts tracked by Bloomberg. He predicts the US equity benchmark will end 2023 at 4,900, a roughly 13% jump from current levels. He cited a strong consumer and a strong start to bank earnings Friday morning among reasons for stock optimism.
The Oppenheimer strategist was also one of the biggest equity bulls last year, a bet that turned sour as stocks plunged. To be sure, one of his calls from last year—that US economic growth would remain well supported by consumer demand—has played out in 2023 and helped propel the S&P 500’s roughly 13% year to date gain.
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