The stock market will surge 26% next year as it has 'one of the best setups' in years, JPMorgan says
stock marketis primed to surge in 2021 as key risks like the US election and COVID-19 pandemic begin to subside, according to a note from JPMorgan.
- "The equity market has one of the best setups for sustained gains in year," JPMorgan said.
- The bank expects the S&P 500 to surge 26% to 4,500 by the end of 2021, according to the note.
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The bank expects the S&P 500 to surge to 4,500 by the end of 2021, representing potential upside of 26% from Thursday's close."The equity market has one of the best setups for sustained gains in years," Lakos said.
Incremental fiscal stimulus and less negative headlines related to trade wars under a Joe Biden administration also lead to a more bullish backdrop for stocks next year.Read more: 600 units and almost 20 flips: Here's how Ashley Wilson created a real-estate investment empire leveraging just 2 simple strategies
With more certainty in the
Read more: Investing pioneer Rob Arnott told us a near risk-free strategy for investors to win big from Tesla joining the S&P 500 — and explained how the company's inclusion will lead index fund managers to 'buy high and sell low'
But there are still risks, mostly around Georgia Senate run-off races in January that will determine control of the Senate. If the Democrats manage to pull off a sweep and gain control of the Senate, there's the potential for anti-growth policies, Lakos said.And if interest rates rise, particularly if the 10-year jumps to 1.50%, Lakos would be "less comfortable with holding US equities," according to the note.
Still, despite the risks, expectations are for 2021 to be a solid year for stocks, with Lakos expecting the S&P 500 to quickly zoom to 4,000 in the first half of the year.
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