reporting season. Worries about potentially escalating tensions in the Middle East rattled financial markets, pushing investors to look for safer places for their money.
The pressure is always on companies to produce fatter profits. But it’s particularly acute now given worries that the other main lever that sets stock prices, interest rates, may not offer much lift in the near term. remain hotter than expected. That’s forced traders to scale back forecasts for how many times the Federal Reserve may this year.
At the same time, Treasury yields in the bond market sank and the price of gold rose, which is typical when investors are herding into investments seen as safer. Perhaps more worrisome was that U.S. consumers may be getting more pessimistic about inflation. Their forecasts for inflation in the coming 12 months hit the highest level since December. Such expectations could ignite a self-fulfilling prophecy, where purchases meant to get ahead of higher prices only inflame inflation.
Because of that, he’s forecasting the S&P 500 could end the year around the 5,200 level, which is roughly where it closed Thursday. He says the index could maybe even rise to 5,500 if inflation pressures ease more quickly or corporate profit growth is stronger than expected.