Baking in a Two-Speed Economy & EPS Backdrop into Our S&P 500 Forecast

About this episode

The episode discusses the updated S&P 500 price target and insights into the current economic landscape and sector positioning.

The big things you need to know: First, we have lifted our 12-month-forward S&P 500 price target to 7,900, which represents a 7.7% gain from the May 7th close. In adjusting our forecast, we are focusing on our valuation/EPS model, which does the best job of baking in a two-speed economy and earnings backdrop. Second, on bigger-picture positioning, we continue to prefer Growth over Value, US over non-US, and like Small Caps (but not as much as Large Cap Growth). Our sector views are mostly unchanged, but we have lowered Health Care to market weight from overweight. Third, we run through the strong stats from 1Q26 reporting season.

Topics covered

• S&P 500 forecast
• two-speed economy
• earnings backdrop
• Growth vs Value
• sector views
• 1Q26 reporting season

Keywords

• S&P 500
• price target
• two-speed economy
• Growth over Value
• Health Care sector
• 1Q26 earnings

Mentioned in this episode

Organizations: RBC Capital Markets

Books & works: S&P 500

Places: US, non-US

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