The S&P 500 could soar 18% in 2021 as social and economic disruptions from the pandemic reverse, says a Wall Street chief strategist

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  • The S&P 500 could hit 4,300 by the end of 2021, nearly an 18% gain from current levels, according to Oppenheimer’s John Stoltzfus.
  • The chief investment strategist said that the successful rollout of several COVID-19 vaccines will lead to “material progress in reversing the societal and economic disruptions wrought by the pandemic since Q1 2020.”
  • Oppenheimer is overweight US equities and favours “meaningful exposure” to international developed and emerging markets.
  • The firm is the latest on Wall Street to initiate a double-digit 2021 year-end price target for the S&P 500.
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The S&P 500 could hit 4,300 by the end of 2021, nearly an 18% gain from current levels, according to Oppenheimer’s John Stoltzfus. The chief investment strategist initiated Oppenheimer’s price target for the benchmark index on Monday, citing the successful launch of a COVID-19 vaccine and supportive monetary policy as the key factors leading to equity gains next year. Stoltzfus said that the successful distribution of several vaccines will lead to “material progress in reversing the societal and economic disruptions wrought by the pandemic since Q1 2020.” His note was published on the same day that the first person in the US was vaccinated against the coronavirus.

The strategist also said that interest rates will remain at historically low levels in a bullish sign for stocks. These rates will be kept low as part of an accommodative monetary policy from the Fed, as well as “secular trends embedded in technology (robotics, algorithms) and globalization that are counter-inflationary while contributing to much needed relation to boost economic activity back to pre-pandemic levels.”


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He also sees earnings in the US receiving a boost, and projects $US175 for the S&P 500 in 2021 as US consumer demand increases and innovation from US corporations storms ahead.

Value stocks have outperformed growth in the last few months, but Stoltzfus sees this representing a broadening of investor appetites for stocks, rather than a longer-term change in market leadership. He said that in 2021 as interest rates remain low, growth will still be attractive for investors.

Oppenheimer is overweight US equities and favours “meaningful exposure” to international developed and emerging markets. Oppenheimer also favours overweighting cyclical stocks over defensive stocks. Stoltzfus has overweight ratings for information technology, consumer discretionary, financials, and industrials. He has an underweight rating for utilities, energy, and real estate.

The firm is the latest on Wall Street to initiate a double-digit 2021 year-end price target for the S&P 500. Goldman Sachs also expects the benchmark index to reach 4,300 by the end of next year, while JPMorgan’s base-case price target for 2021 is 4,400.