{"id":25548,"date":"2023-06-21T13:25:20","date_gmt":"2023-06-21T17:25:20","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/the-ai-boom-will-stay-with-the-sp-500-says-one-of-most-pessimistic-wall-street-firms-heading-into-2023\/"},"modified":"2023-06-21T13:25:21","modified_gmt":"2023-06-21T17:25:21","slug":"the-ai-boom-will-stay-with-the-sp-500-says-one-of-most-pessimistic-wall-street-firms-heading-into-2023","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=25548","title":{"rendered":"The AI boom will stay with the S&P 500, says one of most pessimistic Wall Street firms heading into 2023"},"content":{"rendered":"
\n

Goldman Sachs is sticking to its bullish stock-market forecast for the year while Morgan Stanley has just reiterated its downbeat outlook. But not everyone is clinging to their positions at the halfway point.<\/p>\n

Strategists at Societe Generale headed into the year with one of the more pessimistic S&P 500 targets on Wall Street, of 3,800, though actually that would have represented a flat performance. They have now bumped up their year-end S&P 500
\n SPX,
\n -0.51%<\/bg-quote>
\n target to 4,300, which does mean the benchmark index would drop 2% by the time Santa arrives. <\/p>\n

\n

The team led by Manish Kabra say the \u201cAI boom\u201d stocks have added 500 points to the index, and those gains aren\u2019t about to vanish.<\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

The SocGen team say AI-driven surprises led to a 3% to 4% increase in S&P 500 earnings per share this year. And they note other positive, bottom-up signals. The breadth of earnings per share revisions is less negative than anticipated, and profit margins are starting to improve against the odds indicated by leading indicators.<\/p>\n

There\u2019s also a reshoring boom of non-residential construction.<\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

That said the French bank still sees macroeconomic concerns, listing indicators such as the yield curve, lending standards, the new order components of the Institute for Supply Management\u2019s indexes and its own measures of the U.S. consumer, profit growth and global economic surprises.<\/p>\n

<\/p>\n
<\/p>\n<\/figure><\/div>\n

\u201cAs the profit-margin reversal, credit weakness and sharply rising recession risk will most likely be visible in [the first half of 2024], this should bring the S&P 500 back to 3,800,\u201d SocGen warns.<\/p>\n

They list two positive and negative risks. One is the AI boom feeds into the market like the TMT bubble of the 1990s, which would send the S&P 500 to around 5,500, with the market pricing the index at 25 times forward earnings as was seen after the rate cuts in 1998. The negative risk would be anything that leads oil
\n CL.1,
\n +1.88%<\/bg-quote>
\n to move above $100 per barrel, which would trigger a second hump on U.S. consumer prices and force the Fed to get even tighter.<\/p>\n

The market<\/h2>\n

After Tuesday\u2019s downturn, futures
\n ES00,
\n -0.50%<\/bg-quote><\/p>\n

NQ00,
\n -1.30%<\/bg-quote>
\n traded lower. In fact most assets were fairly steady, apart from bitcoin
\n BTCUSD,
\n +6.11%<\/bg-quote>
\n which was trading around $29,000 amid recent institutional activity in the crypto space.<\/p>\n

For more market updates plus actionable trade ideas for stocks, options and crypto,\u00a0subscribe to\u00a0MarketDiem by Investor\u2019s Business Daily.<\/strong><\/p>\n

The buzz<\/h2>\n

Ahead of his House Financial Services Committee appearance at 10 a.m. Eastern, Fed Chair Jerome Powell told lawmakers to expect higher interest rates.<\/p>\n

Chicago Fed President Austan Goolsbee separately will take part in a moderated discussion.<\/p>\n

In the U.K., inflation rose at a hotter-than-forecast 8.7% year-over-year rate, raising the possibility of a half-point Bank of England rate hike on Thursday.<\/p>\n

FedEx shares
\n FDX,
\n -3.14%<\/bg-quote>
\n are due to see pressure as the company forecast earnings below Wall Street estimates. <\/p>\n

A Congresswoman lit up Twitter by posting her nearly $800 receipt at Costco.<\/p>\n

Best of the web<\/h2>\n

Justice Alito didn\u2019t disclose a luxury fishing trip with a hedge-fund titan who won a landmark Supreme Court case. <\/p>\n

The Pentagon said it overestimated the amount of funding for Ukraine by $6.2 billion. <\/p>\n

JPMorgan Chase says the U.S. Virgin Islands gave Jeffrey Epstein more than $300 million in tax incentives and waived sex-offender monitoring requirements. <\/p>\n

Top tickers<\/h2>\n

Here are most active stock-market ticker symbols on MarketWatch.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
\n Ticker<\/p>\n<\/td>\n\n Security name<\/p>\n<\/td>\n<\/tr>\n
\n TSLA,
\n -5.56%<\/bg-quote>\n <\/td>\n		\n Tesla<\/p>\n<\/td>\n<\/tr>\n
\n GME,
\n -0.28%<\/bg-quote>\n <\/td>\n		\n GameStop<\/p>\n<\/td>\n<\/tr>\n
\n NVDA,
\n -2.27%<\/bg-quote>\n <\/td>\n		\n Nvidia<\/p>\n<\/td>\n<\/tr>\n
\n SPCE,
\n -7.50%<\/bg-quote>\n <\/td>\n		\n Virgin Galactic<\/p>\n<\/td>\n<\/tr>\n
\n NIO,
\n -3.69%<\/bg-quote>\n <\/td>\n		\n Nio<\/p>\n<\/td>\n<\/tr>\n
\n MULN,
\n +15.58%<\/bg-quote>\n <\/td>\n		\n Mullen Automotive<\/p>\n<\/td>\n<\/tr>\n
\n MANU,
\n +1.24%<\/bg-quote>\n <\/td>\n		\n Manchester United<\/p>\n<\/td>\n<\/tr>\n
\n AMC,
\n -1.20%<\/bg-quote>\n <\/td>\n		\n AMC Entertainment<\/p>\n<\/td>\n<\/tr>\n
\n AAPL,
\n -0.53%<\/bg-quote>\n <\/td>\n		\n Apple<\/p>\n<\/td>\n<\/tr>\n
\n NKLA,
\n +8.33%<\/bg-quote>\n <\/td>\n		\n Nikola<\/p>\n<\/td>\n<\/tr>\n<\/table>\n

The chart<\/h2>\n
<\/p>\n
<\/p>\n<\/figure><\/div>\n

China has quietly become an auto exporting heavyweight, notes Brad Setser, senior fellow at the Council on Foreign Relations and a former Treasury Department economist. He said it\u2019s on track to become a net exporter of autos and auto parts to the European Union by the end of the year.<\/p>\n

Random reads<\/h2>\n

Silver for jewelry is being extracted from old X-ray film. <\/p>\n

The story of the world\u2019s fastest accountant, who now sports Europe\u2019s best time in the 100 meters this year. <\/p>\n

This baby seal likes to surf. <\/p>\n

Need to Know starts early and is updated until the opening bell, but sign up here to get it delivered once to your email box. The emailed version will be sent out at about 7:30 a.m. Eastern. <\/strong><\/p>\n

Listen to the Best New Ideas in Money podcast with MarketWatch reporter Charles Passy and economist Stephanie Kelton. <\/strong><\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Goldman Sachs is sticking to its bullish stock-market forecast for the year while Morgan Stanley has just reiterated its downbeat outlook. But not everyone is clinging to their positions at the halfway point. Strategists at Societe Generale headed into the year with one of the more pessimistic S&P 500 targets on Wall Street, of 3,800, […]<\/p>\n","protected":false},"author":1,"featured_media":19415,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-25548","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"\nThe AI boom will stay with the S&P 500, says one of most pessimistic Wall Street firms heading into 2023 | iFintechWorld<\/title>\n<meta name=\"description\" content=\"Goldman Sachs is sticking to its bullish stock-market forecast for the year while Morgan Stanley has just reiterated its downbeat outlook. 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