THE S&P 500 stock index’s stunning run since the start of the year has made many bullish analysts look conservative.
As the benchmark S&P has roared to record highs this year with a gain of more than 11 per cent, many Wall Street analysts have been forced to concede their prior targets were too low and adjust accordingly.
In fact, it has taken less than four months for the S&P to surpass year-end 2013 targets of about two-thirds of the strategists polled by Thomson Reuters in December. Of 47 analysts surveyed, 30 of them expected to see this year end at a level already exceeded by the index.
The Reuters poll in March showed some analysts had revised targets, with the S&P above the midyear target for 21 of 34 analysts surveyed and the full-year target for 18 of 43 analysts surveyed.
One potential catalyst for a pullback could be company results as the pace of earnings season begins to pick up.
Earnings for S&P 500 companies are expected to grow at a modest 1.1 per cent in the first quarter, down from a January forecast of more than 4 per cent, according to Thomson Reuters data. Just six per cent of companies have reported so far.
This week 74 S&P companies are expected to report results. Financials dominate the week, including reports from American Express, Goldman Sachs, Bank of America and Citigroup. Internet companies Google and Yahoo, along with Dow components Johnson & Johnson, Coca-Cola, McDonald’s and General Electric also report results.
In addition to earnings, investors will also scrutinise regional manufacturing data from the New York and Philadelphia Federal Reserve banks, the Fed’s Beige Book and data on consumer inflation and housing starts.