Wall Street firms raise stock target

[00:00:00] Speaker 1: We are at record highs. We have been. We're coming off the best week since April. Those guys were just talking about CPI on Wednesday. Going to be a big event, obviously, with the Fed very much in focus. Oil's been higher. Yields are up a little bit. You have 522 on the 30-year. Keep an eye on that. We certainly are. And then the other numbers that matter. JP Morgan goes to 8,000, joining the club of what is a growing number of members. So there's your 30-year. So JPM's now at 8,000. Why earnings growth? Seemingly why everybody else continues to raise their targets, too. Evercore today says the odds of a bull case to 9,000 are rising as well. Tony Pasquarello, Goldman Sachs, says both the fundamental backdrop and the technicals support a broader continuation of the bull trend. All that, positioning's cleaner. Deleveraging happened. Gross leverage is down a bunch. Degrossing from hedge funds has taken place. So you've got a cleaner outlook. And that's one of the reasons why people are feeling pretty bullish across the board. [00:01:03] Speaker 2: And it's steady as we go. The market continues to move higher. Built upon phenomenal earnings. Historic earnings when you really go back and study the last seven quarters. 8,000. I think that's kind of a foregone conclusion. [00:01:18] Speaker 1: It kind of feels like it, right? [00:01:19] Speaker 2: It kind of feels like it. Here comes 9,000. I don't know, Scott. 10,000 by December of 2027? Why not? I think the market could get there if we continue to have this type of earnings growth. So I really like a lot of the notes. And Tony Pasquarello's note was excellent. Just talking about how we've seen positioning reshape itself. You've seen the deleveraging. That allows you to rebuild once again in the bull market. I think that's what we're seeing. In the moment, it's about alpha generation. What's interesting about today, and you know the Jyoti ETF at the end of July went to 10% waiting for energy. Well, today we're getting rewarded for that. We're seeing a lot of capital flowing into energy today. If you look at the 11 spider ETFs, energy is actually seeing the strongest volume today. So the alpha generation opportunity might just be in energy in the near term because a lot of positioning stepped away from it. But overall, the market's in a good place. [00:02:17] Speaker 1: We haven't heard from you, Kerry, in a minute. So there's a lot of bullishness, obviously, because earnings have been really strong. And the estimates are that it's going to remain very much the same way. Are you as bullish as the others are now seemingly how they've gotten? [00:02:33] Speaker 3: Well, I think that it's great to be bullish right here. We had that pullback in June, July. That could happen if we get the market up another 5%, 6% because people will talk about now the market's a little bit ahead of itself. But what we've got going for us right now is that we finished earnings season. Great numbers, I mean, high double digits, I mean, in the 20% range. You've got more retail engagement. The retail buyer is the individuals are 25% of the market where there were 5%, you know, 25 years ago. Interest rates, even if they make a rate, even if there's one rate, still relatively low. Odds are there'll be no change in that. Doesn't matter what happens to the war, apparently, the market doesn't seem to care enough and they assume it's going to be settled. And, you know, I think that there is a belief that we're hearing more of it, that the U.S. equity market definitely is broadened out. We've got more participation. It is not just about 7 to 10 names. You've got financials acting while health care is up 15% in the last three months. You've got industrials drawing this year. Even if those can't drive a market higher because they're not big enough, there's enough momentum in them. [00:03:51] Speaker 1: Yeah, but the equal weight just came off. It just came off its best week since May. [00:03:57] Speaker 3: Correct. It's up 15% this year versus 13.3% at the S&P. [00:04:01] Speaker 1: There's your broader story. I mean, as long as the earnings story remains intact, why change, you know, if you were bullish, why change your stance as long as the earnings picture doesn't change? Unless you believe that the earnings picture itself is a bit of a bubble and that it only is eventually going to go one way and maybe sooner than people are expecting. I don't know. You tell me. [00:04:26] Speaker 4: I mean, I certainly don't believe that earnings is a bubble in aggregate. You know, if you look at the S&P 500, if you look at the small caps, if you look at the Bloomberg Developed Markets Index, all of those earnings are picking up very nicely. And even though they are going to come off those peaks as we go into 2027, we're still going to be looking at 10, 12, 15% earnings growth. So that is really quite solid. And, Scott, the reason why I think this goes on is because there are what I call the three Cs in the economy, which is corporates. Again, we talked about the strength there, the CapEx. We've had the best rebound in capital goods numbers going back to 2022. And we have the consumer that is also continuing to hang in there. So maybe, you know, the question is, Scott, to your point is what kind of ruins that? And maybe it's the Fed. That's probably the most plausible explanation that I could think about. But I don't think the Fed will actually do that. And, you know, we're waiting for those CPI numbers this week. But here's one stat that I wanted to share. If you start to adjust for real-time, real-world data, for example, the Zillow rent inflation, the real-time inflation, the core CPI would actually be about 1.6%. So is that something that Fed Chair Walsh is doing right now? And is that going to be the numbers we're going to look at in September? Perhaps. So I don't think the Fed actually spoils this.