US stocks ended March with the biggest decline since September 2022, as White House continued to create uncertainty among global investors.
The S&P 500 Index was pushed into correction territory by fears that Trump’s tariffs would lead to tensions in trade and possibly a recession.
Ari Wald says that the benchmark will be able to see some relief by April. Ari Wald is a senior strategist for Oppenheimer.
The S&P 500 is expected to gain ground in April, according to history
Trump’s policies on trade triggered an enormous sell-off of US tech stocks in this month, which ultimately led to the S&P500 falling below its 200 day MA.
In his most recent report, Oppenheimer’s strategist claimed that historically, when the benchmark index starts April below the long-term average moving, it ends the month recovering.
Ari Wald studied data from the last 75 years and concluded that SPX gains about 2.5% in average each April when all the conditions above are met.
The implementation of the new tariffs, on Liberation Day, April 2, could offer at least some certainty. This may help US stocks to inch upwards in the months ahead.
The benchmark S&P 500 is down by more than 8 percent from its high for the year.
The S&P 500 remains hazy in the long-term
Oppenheimer’s strategist indicated that the S&P 500 could bounce back in the near term, but he is cautious about US stocks over the long-term.
Ari Wald said that the recovery of the benchmark index could be short-lived in April. He added, “Investors who buy the current drop should focus on the relative strength while thinking long-term.”
Oppenheimer’s “favourites”, heading into April, include giants such as Costco. They stand to gain from their “unique consumer value proposition”, despite a possible recession.
The current COST stock price is more appealing due to the 0.49% dividend.
Goldman Sachs lowers S&P 500 target again
Goldman Sachs shares Wald’s long-term outlook for the S&P 500. On Monday, the investment firm cut its target for year-end on the benchmark S&P 500 index to an all-time low.
David Kostin is its chief US equity strategist. He now believes that SPX will remain at 5,700 by 2025. This means there could be a gain of just over 1,0% from the current level.
In a note he sent to clients, he said, “These estimates include downward revisions of earnings growth and values, reflecting a lower base case economic backdrop, greater uncertainty, and a higher risk of recession.”
Goldman Sachs lowered the target for the S&P 500 Index at the end of the year from 6,500 down to 6,200 in early March. Goldman Sachs has now lowered its target for the S&P 500 index to 5,700, marking the second time they have done so.
The S&P 500 will rebound after the worst month since 2022. This post may be updated as new information unfolds
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