SoFi CEO enters prepaid forward contract on 1.5 million shares
Investing.com - Morgan Stanley (NYSE:MS) is maintaining its S&P 500 target at 6500, representing approximately 3% upside from current levels around 6308, despite forecasting a substantial economic slowdown in the second half of 2024.
The investment bank expects inflation to increase in the coming months as tariff costs begin affecting consumer prices, with a typical lag of 3-4 months from tariff implementation to CPI impact, though first-quarter front-loading of imports could complicate this pattern. InvestingPro data reveals that despite inflation concerns, high-yield bonds maintain strong fundamentals, with HYG showing a solid 4.71% year-to-date return and maintaining dividend payments for 19 consecutive years.
Morgan Stanley anticipates the U.S. economy will slow later this year as the effects of tariffs and immigration restrictions materialize, noting the recent nonfarm payrolls report indicated cooling but not collapsing labor market conditions, with immigration restrictions slowing labor supply growth.
The firm projects these economic factors will keep the Federal Reserve on hold longer than market expectations, while acknowledging a disconnect between its economic outlook and equity market resilience.
Morgan Stanley’s 6500 S&P target is based on expected earnings of approximately $300 per share—representing about 10% growth—and a price-to-earnings multiple of 21.5x, though the bank warns investors should prepare for increased market volatility later this summer.
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