{"id":77602,"date":"2024-03-12T15:43:43","date_gmt":"2024-03-12T20:43:43","guid":{"rendered":"https:\/\/equitynewsreport.com\/us-economy-headed-for-no-landing-wolfe\/"},"modified":"2024-03-12T15:43:43","modified_gmt":"2024-03-12T20:43:43","slug":"us-economy-headed-for-no-landing-wolfe","status":"publish","type":"post","link":"https:\/\/equitynewsreport.com\/h\/us-economy-headed-for-no-landing-wolfe\/","title":{"rendered":"US economy headed For ‘No Landing’ – Wolfe"},"content":{"rendered":"
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\n\"US
\n\u00a9 Reuters. US economy headed For ‘No Landing’ – Wolfe<\/span>
\n<\/i>\n<\/div>\n

In a Tuesday note to clients, Wolfe Research strategists have revised their base case scenario, now anticipating a “no landing” outcome for the U.S. economy, signaling an optimistic outlook. <\/p>\n

The broker predicts real U.S. GDP growth to exceed 2% year-over-year in 2024, with inflation trends remaining above 2.5%. This shift reflects stronger-than-expected economic resilience, suggesting sustained growth rather than a downturn or stagnation. <\/p>\n

Key factors influencing this outlook include the Federal Reserve’s policy directions, inflationary trends, and the performance of key economic sectors. <\/p>\n

\u201cThe economy has come in much stronger than expected over the past three months,\u201d strategists said in the note. <\/p>\n

\u201cDespite rapidly rising GDP expectations and recent upside inflation surprises, Fed Chair Powell
still appears determined to cut three to four times this year,\u201d they added.<\/p>\n

The strategists believe the Fed is willing to let the US economy “run hot,” suggesting a scenario where growth persists alongside higher-than-ideal inflation rates.<\/p>\n

\u201cUltimately, we believe inflation will prove to be stickier than consensus expects, but don\u2019t think
markets will worry about this until at least \u20182H and perhaps longer,\u201d they wrote.<\/p>\n

\u201cRising breakevens and the recent spike in gold suggest that the market doesn\u2019t expect the Fed to get inflation back to 2% anytime soon.\u201d<\/p>\n

Moreover, the strategists have increased their year-end price target for 2024 to 5,300, based on a 20x multiple of their 2025 Operating Earnings Per Share (EPS) forecast of $265. <\/p>\n

They have also revised their Operating EPS forecasts upward to $245 for 2024 and $265 for 2025, compared to the consensus estimates of $244 and $277, respectively. <\/p>\n

Their base case scenario, referred to as “no landing,” anticipates that market valuations will remain buoyant, supported by the Federal Reserve’s dovish stance. Wolfe expects Price-to-Earnings (P\/E) ratios to remain stable through the end of the year, mirroring the trends observed in 2021.<\/p>\n

\u201cWe expect EPS revisions to remain the key driver of sector and subsector rotation as long as our \u201cno landing\u201d base case remains intact,\u201d the note says.<\/p>\n

When it comes to market breadth, Wolfe Research analysts suggest that a notable narrowing could indicate a major bullish or bearish turn, reminiscent of past market cycles. <\/p>\n

As the market broadens out, the analysts predict that overlooked cyclical sectors, such as certain industrials and semiconductor companies, will excel. Moreover, they foresee small-cap stocks outperforming, driven by a strong growth outlook and positive leading indicators.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. US economy headed For ‘No Landing’ – Wolfe In a Tuesday note to clients, Wolfe Research strategists have revised their base case scenario, now anticipating a “no landing” outcome for the U.S. economy, signaling an optimistic outlook. The broker predicts real U.S. GDP growth to exceed 2% year-over-year in 2024, with inflation trends remaining above 2.5%. This shift reflects stronger-than-expected economic resilience, suggesting sustained growth rather than a downturn or stagnation. Key factors influencing this outlook include the Federal Reserve’s policy directions, inflationary trends, and the performance of key economic sectors. \u201cThe economy has come in much stronger […]<\/p>\n","protected":false},"author":5,"featured_media":77603,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[50,48,49,3],"tags":[],"_links":{"self":[{"href":"https:\/\/equitynewsreport.com\/h\/wp-json\/wp\/v2\/posts\/77602"}],"collection":[{"href":"https:\/\/equitynewsreport.com\/h\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/equitynewsreport.com\/h\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/equitynewsreport.com\/h\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/equitynewsreport.com\/h\/wp-json\/wp\/v2\/comments?post=77602"}],"version-history":[{"count":0,"href":"https:\/\/equitynewsreport.com\/h\/wp-json\/wp\/v2\/posts\/77602\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/equitynewsreport.com\/h\/wp-json\/wp\/v2\/media\/77603"}],"wp:attachment":[{"href":"https:\/\/equitynewsreport.com\/h\/wp-json\/wp\/v2\/media?parent=77602"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/equitynewsreport.com\/h\/wp-json\/wp\/v2\/categories?post=77602"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/equitynewsreport.com\/h\/wp-json\/wp\/v2\/tags?post=77602"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}