Key Takeaways
Infrastructure Capital Management CIO Jay Hatfield raised his S&P 500 price target on May 15, citing robust corporate earnings as a key driver of market resilience even as indices eased from record highs.
"Our call has been for the market to flatten out simply because greed occurs during earnings season and fear after," Hatfield, who is also portfolio manager at InfraCap, said in a separate interview.
The upward revision by Hatfield follows a similar move by Morgan Stanley's Mike Wilson, who also recently boosted his firm's target for the S&P 500. While Hatfield confirmed he was lifting his forecast, the new and previous targets were not disclosed. The move comes as investors weigh strong company profits against persistent macroeconomic headwinds.
Hatfield's bullish call on earnings arrived on a day of contradiction for the market. The S&P 500 lost 0.16 percent to close at 7,400.96 and the Nasdaq Composite shed 0.71 percent. The Dow Jones Industrial Average, however, rose 0.11 percent, buoyed by healthcare stocks like Humana, which advanced 7.7 percent.
Concerns over rising prices intensified after consumer prices rose faster than anticipated, a situation Hatfield links directly to energy costs. "Inflation is not getting any better unless oil prices go down," he said, pointing to disruptions from the ongoing conflict with Iran.
The prospect of sustained inflation has dampened hopes for interest rate cuts from the Federal Reserve this year. According to CME's FedWatch tool, financial markets are now pricing in a 30.5 percent chance of a 25-basis-point rate hike in December, up from 21.5 percent the prior day.
The update from Hatfield signals that some institutional investors see fundamental strength in the U.S. market despite the prevailing anxieties. Investors will watch for upcoming corporate earnings reports to see if the trend of resilient profits continues.
This article is for informational purposes only and does not constitute investment advice.
