Sept 13 Reuters Deutsche Bank has raised its yearend target for the benchmark SP 500 index to 5,750 points from 5,500, citing rising stock buybacks, strong corporate earnings and robust inflows, boosted by strong risk appetite.
We see SP 500 earnings growth continuing to run robustly in the low double digits, in line with typical growth rates outside of recessions, Deutsche Bank strategists said in a note on Sept. 12.
The new target represents a 2.75 upside to SP39;s close of 5,595.76 on Thursday.
Rising U.S. rate cut expectations this year and the hype surrounding artificial intelligence AI have boosted the index, with many brokerages lifting their annual targets for the benchmark and some expecting it to end 2024 as high as 6,000.
In May, Deutsche Bank raised its yearend target for the SP to 5,500, banking on strong corporate earnings to support equity valuations.
The brokerage said a recent pullback in stocks in August due to fears of a weakening labor market and derating of technology stocks seems done for now, with positioning falling back in line with earnings growth.
It added that fears of a cooling labor market have been put to rest with August payrolls growth steadying on a yeartodate basis.
Some aspects that will strengthen the market include a move from de to restocking, a pickup in capital expenditure outside tech stocks, broader manufacturing recovery, and a rise in consumer confidence, strategists led by Binky Chadha, chief U.S. equity and global…