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S&P 500 Should Hit 5,000 in First-Half 2022: JPMorgan

TheStreet logo TheStreet 11/30/2021 Dan Weil
S&P 500 Should Hit 5,000 in First-Half 2022: JPMorgan © TheStreet S&P 500 Should Hit 5,000 in First-Half 2022: JPMorgan

JPMorgan sees the stock market rising again next year on positive fundamentals, pushing the S&P 500 to 5,000 in the first half of 2022.

That would represent a 9% gain from its recent level of 4,594. The index has gained 22% year to date.

"Global supply chain pressures are easing," JPMorgan analysts led by Chief Global Market Strategist Marko Kolanovic wrote in a commentary.

"If this persists, the S&P 500 should continue to deliver strong revenue growth and record margins. U.S. companies delivered much stronger than expected Q3 results, and some key names gave an encouraging outlook on supply chains.

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"Our view all along has been that supply and labor shortages would be temporary and normalize with a decline in Covid-19. Textual analysis of management discussions confirm that trends are stabilizing, with the worst likely behind [us].

"Further, multiple macro indicators are pointing to a thaw in supply chains, and several consumer goods/tech hardware companies are expecting to fully restore production this month.

"We have argued that the supply chain headwind to S&P 500 earnings would be minimal given its lower asset and labor intensity.

"For this reason, we believe other market segments are more levered to a supply chain recovery - e.g. Europe vs U.S., small-caps vs mega-caps, goods producing sectors vs tech/healthcare.

"After months of market participants challenging our equity view, the S&P 500 has reached our 4,700 year-end price target and should rally further to reach 5,000 in the first half of 2022."

The S&P 500 hit a record close of 4,704 on Nov. 18. The 5,000 level would be a 6.3% rise from that figure.

This article was originally published by TheStreet.

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