Jefferies also expects S&P 500 earnings per share (EPS) to climb nearly 10% this year to $267, underscoring expectations for solid profit growth.
The second-quarter earnings season is almost winding down, with some late reporters, especially from the retail space, on tap to announce their financial results. Buoyed by the overall strength of the season, a research firm raised its year-end price target for the S&P 500 Index, a measure of broader U.S. market performance.
Jefferies raised its S&P 500 Index to 6,600 from 5,600, citing robust earnings and alleviation of economic concerns, Reuters reported, citing a note released on Sunday. The firm was the only one that previously held a target below the 6,000 mark.
Artificial intelligence (AI)-driven names and the “Magnificent Seven” led the market gains, while financials saw notable strength, suggesting a resilient macroeconomic backdrop, according to Jefferies analyst Desh Peramunetilleke.
Jefferies also expects S&P 500 earnings per share (EPS) to climb nearly 10% this year to $267, underscoring expectations for solid profit growth.
The SPDR S&P 500 ETF (SPY), an exchange-traded fund (ETF) that tracks the S&P 500 Index, and the Invesco QQQ Trust (QQQ) ETF are up 10.76% and 12.17%, respectively, for the year.
On Stocktwits, retail sentiment toward the SPY ETF remained ‘bullish’ (67/100) by early Monday, accompanied by ‘normal’ message volume. The QQQ ETF attracted only ‘neutral’ (50/100) and the message volume was ‘normal.’
Macro concerns are also easing, with the Federal Reserve led by Jerome Powell widely expected to reduce the Fed funds rate by 25 basis points in September. This is likely to broaden the rally, which has so far remained confined to mega-caps and tech stocks.
Recently, HSBC raised its S&P 500 price target for 2025 by more than 800 points to 6,400, citing similar reasons. Citi raised its target to 6,600 from 6,300, and UBS increased it to 6,100 from 5,500.
Goldman’s forecast, revised up in July, is at 6,600.
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