Barry Bannister is unimpressed by the stock market’s run to record highs. The broad market index has soared to record highs to start the fourth quarter as the Federal Reserve begins its rate-cutting cycle. Last month, the S&P 500 climbed 3.2% to surpass 5,800 for the first time. It closed at 5,815.26 on Tuesday, despite the decline. But Stifel Financial’s chief equity strategist is sticking to his bearish stance. “Despite optimism for a soft landing and the Fed’s interest rate cut, the S&P 500 has rallied nearly 40% year-to-date, it has simply been overdone,” he wrote in a note to clients. “Sure, we can pick the best of them and apply the most overvalued cyclically adjusted valuation level of the last 35 years to show about 10% further upside [to 6,400]but this same analysis of a century of rage also returns the S&P 500 in 2025 to where it started in 2024 (down 26% from that potential peak). ) the Fed will likely lower the real funds rate,” he added. “However, as the Fed tapers, there is a cost to ‘so much profit’ as it undermines the 2% inflation target.” Bannister was successful in characterizing market trends. On March 19, 2020, he correctly said stocks were near Covid-19 lows. In early 2018, he called for a sharp correction due to rising Treasury yields, said he expected the S&P 500 to fall to 5,000 by the fourth quarter, the benchmark has scaled to new highs, while not included in Strategy Research According to CNBC Market, that forecast would mark the second-lowest price among respondents. Only JPMorgan’s Dubravko Lakos-Bujas has a lower year-end target of 4,200, Citi upgraded Cisco Systems from neutral. “While AI is currently a small part of the story (~2% of turnover), we see the potential for a stronger contribution,” Citi wrote. “With the advent of more AI, we are progressively more bullish on the group and expect a continued shift of investors from semi/firmware to networking equipment to benefit the group’s valuation.”
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Stifel’s Barry Bannister sticks to his bearish stance on the market
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