The S&P 500 closed at an all-time high on Thursday.
And this rally has largely caught off guard Morgan Stanley’s Adam Parker, who raised his year-end price target on the S&P ot 1,600 just a month ago.
“The truth is that we are starting to think our year-end target is too low – already,” says Parker in his note today.
In a note titled “Five Things We’ve Been Thinking,” Parker says that the market kind of reminds him of basketball star Kobe Bryant, who went down on Friday night with a potentially career-ending injury.
3) Mamba: Kobe Bryant, the famous basketball player, is scoring the most points and playing the most minutes for anyone his age in the history of the NBA this season, until his injury last week. He is known for his relentlessness. It got us thinking this weekend that the magnitude and duration of the recent market rally are kind of Mamba-esque. Through the end of March, the market is up nine of the last 10 months, and by 17.4% over that time frame (not counting another 1.25% month-to-date in April). This is the 34th time in the past 50 years that the market has rallied for 9 out of 10 months, and only one of those rallies went 10 for 10. There have been 139 out of the 582 10-month periods where the market rally was larger, meaning that while this has been a big rally, it has been marked more by its steadiness and relentlessness than its sheer magnitude. As our work has shown for some time, the week-over-week changes in the Fed balance sheet and the S&P500 are highly entrained, and we think that this is certainly responsible for the durability and consistency of the market rally over the last 10 months.
Interestingly, Parker only seems to focus on the good things like Bryant’s “relentlessness,” and not his sudden injury.
Perhaps he’s hoping to use that analogy later.