As Washington continues to switch back and forth between escalating and de-escalating a trade war, Wall Street has remained cautious. But Brett Ewing, Chief Market Strategist at First Franklin Financial Services, explains why he sees a potential S&P 500 surge ahead.
Full Transcript Below:
Brett Ewing: My outlook for the S&P 500 over the next six months is probably on the higher end. I’ve maintained 6,900 on the S&P will get close to that, if not surpass over the next six months. I’m certainly one of the highest out there on the street, and I understand that. But I do believe some of the policies that are being implemented right now will pay massive dividends going into next year. And I think once we get some of the uncertainty that’s out there regarding the trade issues, the tax bill passage, and we can move past that going into the fall. I believe that the earnings estimates are going to start going back up on the S&P for 2026, and I do believe the market will start recognizing that in the fourth quarter of this year.
I think a lot of the pessimism is coming from just the reaction from the tariffs and what that’s going to mean. Is it inflationary? Is the Fed going to cut? There’s a lot of issues out there with the tax bill that people don’t understand yet. And I think we’re at a very high level of uncertainty out there. I think that’s what’s pushing interest rates up. And that’s also creating an additional level of uncertainty. The term premium right now in the longer end of the bonds is at one of its highest levels. It’s been in quite a while. And when you reflect on what’s actually happening out there with all this policy change, it probably should be at an elevated level. But I believe as clarity comes into these markets on what the details of the trade policies are with these other countries and the effects that it could have on opening up US business into areas of the global markets that have never been in. I believe that clarity will come into about these issues. And on the tax bill going into the end of this year, and I believe that’s going to give peace and an Avenue for business leaders to really start investing their capital because they’re going to know the playbook from there.
