The last bears on Wall Street

The bulls are running rampant as indexes hit new high after new high, dragging Wall Street analysts along with them. The last few weeks have seen some of the best-known pros revise their end-of-year price targets higher as we hit the halfway point of 2024, and who can blame them? No one wants to seem like a stick in the mud when the rest of the market is buying into rate cut hopes and AI fever.

No one, that is, but Stifel’s Chief Equity Strategist Barry Bannister and JPMorgan’s Chief Market Strategist Marko Kolanovic. They are two of the last prominent bears standing on Wall Street, and neither seems poised to revise their S&P 500 price targets higher any time soon.

In a world of blind optimism, it can sometimes be helpful to hear the counterargument—after all, your investing thesis shouldn’t be based solely on hope, but rather a well-balanced look at the whole picture.

• JPMorgan believes the S&P 500 will end the year at 4,200—about 20% lower than where the index stands today. Kolanavic’s reasoning: valuations.
  • “However, with very high equity valuations (as well as tight credit spreads and low levels of volatility), we do not see equities as attractive investments at the moment and we don’t see a reason to change our stance,” Kolanovic wrote in a note to clients on Monday.
• Stifel’s price target is 4,750, which is actually higher than the firm’s original call of 4,650 at the beginning of the year, but still more than 10% lower than today’s levels. Bannister’s reasoning: timing.
  • “With rates normalized and the mid-2024 pop in Core PCE to just over 3% that our models indicate, we expect Fed rate cuts to be pushed back further, causing a middle quarters correction for equities,” Bannister wrote to clients late last week.
• And in a CNBC interview on Tuesday, Bannister reiterated that now isn’t the time to change course.
  • “Every bad call I ever made was turning bullish in May or bearish in October. I would be a little skeptical of a bullish conversion in May at this point in time,” he said. “We’re looking for a pullback in the market. It doesn’t mean it will never rise again, it just means that we’re looking for a correction.”—MR