A New High? Wall Street Strategists Are Not Impressed

After a slow start to 2018 that had many whispering about a coming bear market, U.S. stocks have come on strong. The S&P 500 Index rallied again on Wednesday to another new high, bringing its year-to-date gain to 8.99 percent. And yet, the one group whose primary job is to tell investors when to buy and sell stocks is showing unusual restraint.

The median estimate of 25 Wall Street strategists in a survey by Bloomberg News released Wednesday is for the S&P 500 to end the year at 3,000, which is about 3 percent higher than where the benchmark ended the day. That would certainly be welcome, but it feels a bit underwhelming given an economy that grew at a greater-than-4-percent clip in the second quarter, fueled by corporate earnings that are rising better than 20 percent a year. It’s also no different than strategists’ forecast in March. Perhaps the lack of animal spirits may be due to many of these prognosticators being away from the office enjoying summer vacations, and we’ll see estimates surge following the Labor Day holiday. Then again, it could just reflect the general notion that economic growth has peaked for the moment. Citigroup Inc.’s economic surprise indexes show that not only has U.S. data largely missed estimates this month — they’ve missed by the greatest degree since September 2017.