With markets 50% off their lows, everyone is a bull now.
FT Alphaville: Joining Goldman Squid [Ed note: et tu FT?], Credit Suisse and HSBC, Nomura sees a further upside of 13% for global equities in the second half of the year. And like its peers, Nomura’s justification for year-end target prices like 5,300 for the FTSE 100 and 2,900 for the Euro Stoxx 50 is the improvement in corporate earnings, valuations and the high cash balances of institutions.
In fact this is fast becoming the new equity market consensus. Goldman, for example, is now targeting 1,060 on the S&P 500 by the year-end, on account of better-than-expected results, particularly from the financial sector, while Credit Suisse is looking for 1,050 citing earnings revisions and cash balances and HSBC expects 1,020 because the earnings downgrade cycle is coming to an end.
We mentioned it earlier, but it’s amazing how not only are analysts totally behind the curve on this rally, but they’re even logrolling over each other: Credit Suisse is bullish because other analysts have stopped with the downgrades and negative earnings revisions!
Meanwhile, the Nomura analyst, Ian Scott, also cited this handy chart as more support for the cash-is-sitting-on-the-sidelines meme.
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