Skip to content Skip to sidebar Skip to footer

Wells Fargo sees economic “soft patch” capping further S&P 500 gains

A Wall Street sign is seen in Lower Manhattan in New York, January 20, 2016. REUTERS/Mike Segar/File Photo Acquire Licensing Rights

NEW YORK, Nov 27 (Reuters) – An upcoming “economic soft patch” will likely weigh on the recent U.S. equity rally and stall sectors such as consumer discretionary and small-cap stocks, strategists at the Wells Fargo Investment Institute warned in a note on Monday.

The firm cut its 2024 earnings estimate for the Russell 2000 index of small cap stocks while maintaining its 2024 year-end S&P 500 target price range between 4,600 and 4,800. The index traded near 4,550 on Monday.

While the U.S. economy is slowing, it has not deteriorated enough to justify the Federal Reserve beginning to cut interest rates, the firm noted. As a result, the economy will likely suffer from the squeeze of tighter credit longer than markets appear to anticipate, it said.

“It is our…

Read the full article…