JPMorgan Sees S&P 500 Hitting 4,700 by Year-End

While many stock analysts see a stock-market correction soon amid slowing economic growth, JPMorgan sees it differently, predicting the S&P 500 will reach 4,700 by year-end.

© TheStreet JPMorgan Sees S&P 500 Hitting 4,700 by Year-End

That would represent a 5% gain from the recent level of 4,481. The index at last check gained 0.8%.

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“Despite concerns about the recent downshift in economic and business cycle momentum, we remain confident that strong growth lies ahead and activity is bound to reaccelerate,” JPMorgan strategist Dubravko Lakos-Bujas wrote in a commentary cited by CNBC.

“We remain positive on the equity outlook, and expect S&P 500 to reach 4,700 by end of this year and surpass 5,000 next year on better-than-expected earnings.”

Stock bears point to the spread of Covid, waning government stimulus, falling consumer confidence and a slowdown in hiring growth.

“We see these risks as well-flagged and in some cases overdone,” Lakos-Bujas said.

“As long as Covid continues to ease, strong momentum should continue into 2022 as businesses start to rebuild depleted inventories and ramp-up [capital spending] from historically depressed levels.”

Among the stocks that JPMorgan recommends are United Rentals , Southwest Airlines and General Motors .

Last week, Binky Chadha, chief global strategist at Deutsche Bank, said stock valuations are quite stretched, and that could mean a rough stumble is in store for the market.

The valuations are “historically extreme” in almost any metric, he said in a commentary cited by MarketWatch.

As a result, “With the current cycle advancing very quickly, the risk that the correction is hard is growing,” Chadha said.

This article was originally published by TheStreet.

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