This Week's "Noise"
The Federal Reserve’s favorite inflation price index, Personal Consumption Expenditures (PCE), will come out Thursday morning; US government shutdown possible (again).
Current Outlook (6 to 12 months)
Market
Goldman Sachs, UBS raise S&P targets on earnings resilience, robust economy (Bloomberg); We continue to expect US stocks to see a modest return of 5 to 10% in 2024, but we might have an upside surprise.
Economic
Federal Reserve minutes released last week indicate no rush to lower interest rates; Investors also predicting no recession for first time since Apr-22. (Bank of America).
Long-Term View (4 to 7 years)
Long term we believe the US economy will continue to outperform other world economies. This is supported by combination of re-shoring manufacturing, new investments resulting from the Inflation Reduction Act, US energy independence, and higher productivity due to the implementation of Artificial Intelligence (AI) software/systems.
We started 2023 predicting the broad stock market would return to the old highs in one to two years. It took only one year. We believe the US stock market should be 40% to 60% higher by the end of 2028. A S&P 500 index of 7,000 to 8,000 appears possible.
Bonds have re-emerged as an important part of asset allocation as yields have risen. We expect a diversified bond portfolio to produce returns 3% to 5% above inflation for the next 5 to 7 years.
“How many millionaires do you know have become wealthy by investing in a savings accounts? I rest my case.” - Robert G. Allen, author and well-known Investment Advisor
See important disclosures below:
The information contained in this report does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete.
Any opinions are those of John O’Hare III and not necessarily those of Steward Partners. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions, or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected.
Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. Past performance does not guarantee future results. Future investment performance cannot be guaranteed, investment yields will fluctuate with market conditions.
The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market.
The NASDAQ composite is an unmanaged index of securities traded on the NASDAQ system.
The investment strategies discussed are in an investment advisory program in which the client’s Wealth Manager invests the client’s assets on a discretionary basis in a range of securities. Investment Advisory programs are described in the applicable Steward Partners Investment Advisory ADV Part 2, available at https://adviserinfo.sec.gov/firm/summary/283004 or from your Wealth Manager.
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