Friday, November 20th marks the sad 1 year anniversary of the passing of Alfred E. Smith IV. Al was a friend to all and an ally to many. His soul and his family remain in our thoughts and prayers daily. My post from December 2, 2019: Alfred E. Smith IV – Requiescat In Pace – can be found here
N.B. It is quarterly board meeting season, as a result, time is limited and this week’s note is strictly limited to the economic calendar and Sam Stovall commentary.
Market volatility is expected to remain high, especially as bulls and bears debate (1) the impact of the still-unresolved election, (2) the growing spike in Covid-19 cases in the U.S., and whether it will lead to a double-dip recession as is likely in Europe, (3) the resulting slowdown of economic growth and reduction in 2021 EPS forecasts, which would make the market vulnerable to a price decline from stretched valuations, and (4) the likelihood that Democrats and Republicans will agree on a near-term stimulus plan. We think the approaching rollout of Covid-19 vaccines will likely encourage economists and analysts to elevate, not reduce, their 2021 GDP and EPS growth forecasts, which will lower the currently stretched valuations. However, it may also lead to an increase in inflation and interest rate assumptions, which have already triggered renewed interest in value stocks. We think the market will continue to climb this wall of worry, and have raised our 12-month S&P 500 price target to 4080, implying a 15% price rise from its November 10 close.
Sam Stovall | Chief Investment Strategist CFRA
Economic Calendar for the Week
(All times EST)
Monday
8:30 am Empire State Manufacturing
Tuesday
8:30 am Retail Sales
8:30 am Import and Export Prices
9:15 am Industrial Production
10:00 am Business Inventories
10:00 am Housing Market Index
Wednesday
7:00 am MBA Mortgage Applications
8:30 am Housing Starts and Permits
10:00 am Quarterly Services Survey
10:30 am EIA Petroleum Status Report
Thursday
8:30 am Weekly Jobless Claims
8:30 am Philadelphia Fed Manufacturing Index
10:00 am Existing Home Sales
10:00 am E-Commerce Retail Sales
10:00 am Leading Indicators
11:00 am Kansas City Fed Manufacturing Index
Friday
1:00 pm Baker Hughes Rig Count
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