Barry Bannister is not surprised by the stock market’s run to record highs. The broad market index rose to record levels to start the fourth quarter as the Federal Reserve begins its rate-cutting cycle. Over the past month, the S&P 500 has risen 3.2% to break above 5,800 for the first time. It closed at 5,815.26 on Tuesday, despite the decline. But Stifel Financial’s chief equity strategist is sticking to his bearish stance. “Despite soft landings and Fed rate cut optimism, the S&P 500 is up nearly 40% for the year,” he wrote in a note to clients. “Sure, we can pick the best of them and apply the most cyclically adjusted overvalued valuation level of the last 35 years to show about 10% more upside (to 6,400), but the same analysis of a century of manias. Also, the S&P 500 returns in 2025 to start 2024 (down 26% from that forecast peak). “The overvaluation of the S&P 500 supports (and fully reflects) the Fed’s cut in the real funds rate,” he added winning” comes at a cost, as Bannister has been successful in calling market trends. On March 19, 2020, stocks were near Covid-19 lows, calling for a sharp correction in Treasury yields .However, not all of his predictions have come to pass.This summer, he said he expected the S&P 500 to fall to 5,000.Instead, the benchmark has scaled new highs. While not included in CNBC Pro’s Market Strategist Survey, that forecast would mark Stifel as the second lowest among respondents. Only JPMorgan’s Dubravko Lakos-Bujas has a lower year-end target of 4,200. Elsewhere on Wall Street this morning, Citi upgraded Cisco Systems to buy from neutral. “While AI is currently a small part of the business (2 percent), we see the potential for a stronger contribution,” Citi wrote. “With more AI coming, we are increasingly constructive on the team and expect continued investor rotation from semi/hardware to network gear to benefit the teams’ valuations.”
