（原标题：Wall Street Frontline ｜CFRA's Sam Stovall：our S&P 500 12-month target is 5610）

On Wednesday May 15th, the Labor Department’s Bureau of Labor Statistics reported that the consumer price index rose 3.4 % in April from a year earlier, down from 3.5 % in March. The new inflation numbers come amid increasing concern among investors over the path of price increases in the U.S.  After the CPI release, markets reacted positively, and all three major indexes surged to record highs.

In this episode of <Wall Street Frontline>, we invited Sam Stovall, Chief Investment Strategist at CFRA Research to analyze recent economic data and discuss the trajectory of the Federal Reserve’s interest rate path.

Wall Street Frontline: This past Wednesday May 15th, S&P 500, Nasdaq and Dow all hit record highs after April CPI release, which indicated inflations cooling down slightly in the first time in six months. What message does this send out to the market? Do you think this marks the beginning of a sustained downward trend in inflation, or is it too early to tell?

Sam Stovall: Well, I think that first off, Fed Chair Powell indicating that a rate hike was highly unlikely was the first opportunity for investors to breathe a sigh of relief because that risk had been built into stock prices. When we then got better than expected PPI and CPI data, that added fuel to the investors' optimism and pushed these indices to new all-time highs. As a result, because of patterns in the past, it has caused investors to be at least optimistic in the near term. I think it certainly indicates that while earnings are going higher, inflation is likely to continue to edge lower.

Wall Street Frontline: How do you think the recent CPI, as well as PPI data, will influence the Federal Reserve's monetary policy decisions in the coming months?

Sam Stovall: Well, at every FOMC meeting, the Fed reminds us that they are data dependent, so they will be looking at all the factors that relate to employment and inflation. With the recent PPI and CPI data coming in a bit cooler than anticipated, and with the PCE (Personal Consumption Expenditure) report, the Fed's favorite, expected by the end of the month, we think it will be equal to last month's numbers or possibly even lower. I think that will help contribute to investor optimism. That said, if needed, the Fed will be slower to lower interest rates if they feel that the fight against inflation has not been won. But right now, we still believe that the Fed will be cutting rates twice this year, once in September and again in December.

Wall Street Frontline: By the end of 2024, what range do you think the interest range will fall between?

Sam Stovall: Well, by the end of 2024, our belief is that it will be around four, below four and a quarter percent. So, not a dramatic decline, but certainly a move in the right direction, which would help bond investors, but also help equity investors both in the US and those who have international exposure because it might allow for a softening in the value of the US dollar.

Wall Street Frontline: After S&P hit all time high, BMO Capital Markets lifted 2024 year-end S&P 500 target to 5,600 from 5,100, which is Wall Street’s highest forecast for S&P. At the same time, Goldman Sachs Chief US equity strategist David Kostin said that the stock market has peaked, and the S&P 500 will trade flat for the rest of the year. What’s your view point on this?

Sam Stovall: Well, while we do not believe that the market has peaked because our 12-month target is 5610 on the S&P 500, which implies a 5440 year-end 2024 target, the year-end target is about 4% growth from here, and the 12-month target is less than 8% growth from here. Both are not out of the historical range of possibilities. My belief is that because we recovered everything, we lost in the prior bear market of 2022 plus we have recovered from the recent pullback, I think in the near term, meaning the next three or four months, the S&P could continue to advance by another 7 to 10% before falling into a new decline of 5% or more. The reason I believe that is because we had the 11th strongest first-quarter return since World War II, and of the top 15 since World War II, 13 of them had declines of 5% or more shortly thereafter. Those that only had declines in the 5%—7% range ended up having two declines in that calendar year. So, I think that we're not out of the woods just yet. While my long-term target is positive, I think that while prices will rise, so will volatility.

Wall Street Frontline: You mentioned that your long-term outlook for the market is positive. Given the current market dynamics and economic indicators. Where do you see the greatest potential for growth and what should investors be cautious about?

Sam Stovall: Well, there are a variety of areas that could answer that question. First off, longer-term opportunities lie in the mid and small cap arenas because they are currently trading at a 25% and 30% discount to their relative PEs versus the S&P 500. Also, I find that international equities are trading at double-digit discounts to the S&P 500. So, a diversified approach will be good for the year ahead, especially because right now the S&P 500 is trading at a 30% premium to its own average PE over the last 25 years. As a result, should we end up with more stubborn inflation or just the fact that valuations remain stretched, I think you want to be looking toward those areas that have not participated. Within mid and small cap stocks, we think areas such as consumer discretionary, industrials, materials, and financials should do fairly well because they would benefit from a lower interest rate environment. They would also benefit from a continuation of GDP growth expectations and have not done as well as technology or communication services, and therefore have more upside potential.

Wall Street Frontline: Looking back at the first half of 2024, were there any surprises or key events that significantly influenced market movements? which sectors performed the best and which lagged behind? What were the driving factors behind these trends?

Sam Stovall: Well, it's been a very good first half of the year, with ten of eleven sectors in positive territory, led by communication services with a near 20% advance and technology up more than 15%. Surprisingly, utilities were up by 14%. The only decliner was real estate, due to the sluggishness of the Fed to cut interest rates. Utilities were a surprise; you would think they would also take a hit because of the Fed keeping rates higher for longer. However, I think utilities have benefited from this AI craze, as we have seen components such as Constellation Energy, NRG Energy, and Vistra Corp post increases anywhere from 60% to 135% on a half-year basis. Mainly, they are likely to be the utilities powering the AI craze. Take those three stocks out, however, and the utility sector underperformed the S&P 500. So, I think investors should be very careful about blindly diving into these stocks.

Wall Street Frontline: What is your long-term outlook for the technology sector? Especially AI concept stocks.

Sam Stovall: Well, we continue to have a fairly optimistic outlook on technology in general and semiconductors in particular. Semiconductors are expected to show a 46% earnings increase for 2024, followed by a near 35% increase in 2025, both significantly higher than that for the S&P 500. We have quite a number of names in the semiconductor space that we have ranked as "Buy" or "Strong Buy." While there could be elevated volatility in this group as investors play tug of war with those who think the group has gone too far, we really think that, like the internet in the late 1990s, this is just the beginning of the explosion in AI. Therefore, for the long term, we still have a lot of these stocks ranked as "Buy" or "Strong Buy".

出品：南边财经全媒体集团 

操办：于晓娜

统筹：向秀芳

记者：周蕊 

制作：段伊航（实习生）

贪图：林军明 廖苑妮j9九游会真人