S&P Cuts Its Outlook On The S&P 500

standard and poor

Few people can tell you more about the S&P 500 than market historian and S&P Chief Equity Strategist Sam Stovall. (It runs in the family: his father, Bob Stovall, is a market veteran who is also known for popularizing the Super Bowl indicator.)

So, it’s probably worth noting that Sam Stovall just cut his 12-month target on the S&P 500 to 1260, down from 1400.

“The target reduction reflects our belief that the risk of global recession is rising,” said Stovall. “The near-term outlook for the equity markets may look favourable, but we see anemic economic growth pressuring long-term equity performances.”

What does he mean by a favourable near-term outlook? He explained in an interview on PBS’s Nightly Business Report:

Well, actually, history says that we might end up with a fairly favourable fourth quarter because this most recent decline of more than 14 per cent was the tenth time since World War II that we had a third quarter decline in excess of 10 per cent. And in the prior times, the average price change was a gain of 7.2 per cent and we saw the market rise in eight of those nine observations.

Don’t Miss: How Global Stock Markets Got Crushed In Q3

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.