Modest Market Growth Seen in Second Half
Sam Stovall, chief investment strategist at Standard & Poor’s, told CNBC’s “Closing Bell” that he expects the S&P 500 to close the year at about 1,550 -- but those taking a more cautious view peg the index at about 1,510.
The S&P 500 recently hovered at 1,523.
“In general, I would not expect tremendous growth from here,” Stovall said Thursday.
He said that inflation could flare up again.
“I think we could be looking at a contained situation,” Stovall said. “I think with a combination of earnings deceleration combined with higher interest rates -- we’re forecasting the ten-year note to close the year at 5.25% -- and general concerns about growth in the economy being a little bit stronger, we could end up seeing an acceleration in inflation.”
Russ Koesterich, head of investment strategy at Barclays Global Investors, said there may be some short-term volatility ahead, but he thinks the market can go higher.
“I think the key for the market right now is the ability to digest the fact that the ten-year [bond] has moved out of the 4.5% to 5% range that we’ve all enjoyed, and probably into a range of 5% to 5.5%,” Koesterich said.
“I think that adjustment will take some time," he added. "The summer could have some volatility -- maybe a modest pullback. I think if inflation continues to decelerate, which is the pattern we’ve seen in the core CPI, you could have a decent fourth quarter and put on some additional gains from here.”