Stifel Forecasts S&P 500 Will Drop 10% as Soon as This Quarter
- Sticky inflation, delayed rate cuts will trigger a correction
- ‘The next 500 points for the S&P 500 are down,’ Bannister says
Stifel is projecting a mid-year increase in a key inflation gauge, the firm’s models indicate monetary easing will be further delayed.
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Stalled-out progress on inflation, which will push Federal Reserve interest-rate cuts to later than traders currently expect, is probably going to trigger a big decline in US equities in the coming months, according to Stifel Nicolaus & Co.’s Barry Bannister.
The S&P 500 Index will likely drop roughly 10% in the second or third quarter to around 4,750, the strategist and his team warned clients in a note Sunday. With Stifel projecting a mid-year increase in a key inflation gauge, the firm’s models indicate monetary easing will be further delayed, causing equities to plunge.