Barclays’ chief equity strategist believes the S&P 500 presents a golden opportunity for long-term investors, predicting the SPX will rise to all-time highs before the year is out.
In a new interview with CNBC, Venu Krishna, Managing Director and Head of US Equity Strategy at Barclays, said: He says The S&P 500 trades at less than 20 times its price-to-earnings ratio, allowing investors to accumulate stocks at an “attractive entry point.”
According to Krishna, the bank believes that the conflict in the Middle East will not act as a long-term headwind for the market.
“So I think, in general, our view is that in the history of geopolitical risks over the last 10 to 15 years, most of them have generally been geographically contained, and they normalized relatively soon. So I think you could say the market has been somewhat coddled into following that view. And indeed, the Middle East crisis is broader in terms of Saudi Arabia, Oman, Bahrain, Kuwait, the list goes on. But I think the view is that there will be a solution. And that’s our base and that’s why we approached it from a broader standpoint. Scenario analysis.
Krishna expects the Standard & Poor’s 500 index to rise to 7650 by the end of 2026, as he believes that the United States is able to absorb the impact of rising oil prices as long as oil remains between $85 and $100.
“Essentially, I think the view is that the US economy is more immune to this crisis than the rest of the world. Asia is the most exposed. And so is Europe by and large. But the United States as a net energy exporter is in a very good position…
It will have some impact on consumption. In fact, to reach 7650, we assume that consumption is declining. We assume that global economic growth will take a heavy hit. But we also assume that the US economy will be relatively more resilient. And this is how we arrive at these numbers.
But if the situation in the Middle East deteriorates, Barclays expects the S&P 500 to trade at 5,900 points.
At the time of writing, the S&P 500 is trading at 6,575, indicating upside potential of about 16% if the SPX achieves Krishna’s year-end target.
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