U.S. investors and traders are back after the three-day Easter holiday weekend. However, markets aren’t doing much early in the U.S. trading session.
The Dow and S&P 500 are flat. The Nasdaq is just a little less than flat.
Europe, UK, Australia, and Hong Kong are among the markets that remain closed for Easter Monday.
When markets do start moving, where will they go?
Goldman Sachs’ David Kostin reiterated his opinion that stocks still have room to rise from here. His 12-month target on the S&P 500 is 1,950
Deustche Bank’s David Bianco, however, think we head lower. From his new note:
“April’s high volatility swung the S&P ~5% from an 1890 high to 1815 low. This means that investors are unsure in their macro outlooks. What’s increasingly uncertain is the degree to which growth accelerates and 10yr Treasury yields climb. We think those expecting sustained GDP growth of >3% should prefer smaller growth (high PE) stocks over larger value (low PE) stocks. This outlook aligns more with an 1850 S&P yearend target as yields should more quickly ascend toward normal. Those expecting GDP growth to be <3% should prefer low PE mega-caps as the climb in yields should be limited and support higher fair value steady-state PEs, and could raise the S&P to 2000 within 12 months.”