Will Bulls Take a Pause on the S&P 500 Index?
Mike Wilson in an interview with CNBC
In an interview with CNBC’s Halftime Report on September 22, 2017, Mike Wilson, chief equity strategist at Morgan Stanley (MS), shared his views on the bull market, his expectations for the S&P 500 Index, and which sectors could do well in the near term.
Interested in COMP-INDEX? Don't miss the next report.
Receive e-mail alerts for new research on COMP-INDEX
Mike Wilson on the S&P 500 index
In an earlier interview in May 2017, Wilson said the S&P 500 index could touch the 2,700 level in the next 12 months. In the last week of September 2017, the S&P 500 index (SPY) (QQQ) touched the 2,500 level. The expectation for tax reform is increasing. President Donald Trump and his administration are putting a huge effort into passing a tax reform bill, which could drive the index higher.
According to Wilson, both the S&P 500 index and the Russell 2000 index (IWM) showed some consolidation in the last four months. Both indexes are now representing the same situation, which we saw at the start of November 2016 just before the 2016 US elections (IVV). If tax reform passes, the bulls might continue their positions on the index.
On a year-to-date basis, the Russell 2000 index rose nearly 10.4% as of October 2, 2017. The S&P 500 index rose nearly 11.0% during the same period and needs to rise another 6.7% to meet Wilson’s target level.
In spite of huge political uncertainty, the index is making new highs. On October 2, 2017, it started its fourth quarter of 2017 with a new high and closed at a new high of 2,529. However, rising geopolitical uncertainty might drag down the bulls on the S&P 500 index.
In the next part of this series, we’ll look at Wilson’s view on the various sectors.