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<\/picture>\n“Our current caution reflects several factors, including ebullient sentiment readings, stretched valuation levels, and slipping earnings revision momentum,” wrote Citigroup Inc. strategist Tobias Levkovich, who expects the S&P 500 to trade between 3,600 and 4,000.<\/p>\n
| Ticker<\/th>\n | Security<\/th>\n | Last<\/th>\n | Change<\/th>\n | Change %<\/th>\n<\/tr>\n<\/thead>\n |
|---|---|---|---|---|
| SP500<\/td>\n | S&P 500<\/td>\n | 3900.1<\/td>\n | -31.23<\/td>\n | -0.79%<\/td>\n<\/tr>\n |
| Powered by<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n TEXAS STORMS CAUSE EPIC DROP IN U.S. OIL PRODUCTION<\/strong><\/p>\n He added that a “neutral stance is realistic,” but warned stocks could fall up to 20% from current levels while ruling out a decline of 50% or more as the U.S. economy is exiting, not entering, a recession and Fed policy remains accommodative. <\/p>\n Others on Wall Street worry that rising interest rates will derail the stock market’s rally. Some strategists are eyeing the 1.5% level on the 10-year yield, which also corresponds to the S&P 500’s dividend yield.<\/p>\n The 10-year rising above 1.5% would cause the S&P 500 to “adjust downward by 8% or more,” wrote Nomura strategist Masanari Takada. His main scenario, however, is for the benchmark yield to hold in the 1.3% to 1.4% area and having a mild impact on stocks.<\/p>\n Breaching 1.5% on the 10-year would be a “huge overshoot,” said David Rosenberg, chief economist and strategist at Toronto-based Rosenberg Research.<\/p>\n Even if that were to happen, Rosenberg thinks investors would be best to “ignore calls of peril” as the 10-year has often risen above the S&P 500’s dividend yield by 100 basis points or more “without upsetting the apple cart.” He remains cautious on risk assets in general due to their pricing.<\/p>\n While more strategists are erring on the side of caution, big money managers are as bullish as ever, according to a survey conducted by Bank of America.<\/p>\n A net 80% of respondents said stocks were in a bull market while 13% thought they were in a bubble.<\/p>\n |