Europe’s Stoxx 600 inches lower amid French political crisis
Investing.com -- The S&P 500 could surge to 9,000 by 2026 under a “bubble scenario,” according to Evercore ISI analyst Julian Emanuel, who sees growing signs of capital markets acceleration following a leveraged buyout.
In a note titled “Goldilocks Plays Madden NFL ’26,” Evercore ISI reiterated its year-end 2026 price target of 7,750 for the S&P 500 and raised the probability of a bubble scenario to 30%.
“SPX YE 2026 PT of 7,750, and increased probability of a Bubble scenario to 9,000 to 30%, [is] reinforced by landmark EA LBO,” the firm wrote.
Emanuel said such transactions signal the kind of capital markets acceleration that “is key to continuation of the Bull market.”
Evercore ISI compared the current environment with past major buyouts such as RJR Nabisco in 1988 and TXU in 2007, which “marked the acceleration of the Capital Markets Cycle” but also brought “significant near term volatility.”
The firm maintained its base case for a pullback, noting that “SPX 50 DMA is 6,497, 100 DMA 6,288,” while cautioning that financial stocks, typically beneficiaries of market acceleration, have underperformed recently.
Strategically, Emanuel advised investors to maintain exposure to “AI Enablers, Adopters and Adapters” in the communication services, consumer discretionary, and information technology sectors, while hedging positions through Nasdaq put options.
The analyst also highlighted health care as a tactical opportunity, calling it “underowned” but now benefiting from easing policy and tariff concerns.
“Politics became a positive ‘Factor’ for the sector after a high profile drug price/tariff deal alleviated ‘worst case’ concerns,” Evercore ISI said, noting similarities with the rebound in energy stocks in 2021–22.