A pair of Wall Street’s most prominent US equity strategists are at odds about whether stocks can extend this year’s rally against the reality that interest rates will remain higher for longer. At Bank of America Corp., however, Savita Subramanian thinks equity markets can still thrive if rates remain elevated. The S&P 500 Index logged back-to-back drops in August and September, paring some of its double-digit gain this year. Moreover, she points out that the S&P 500 returned an annualized 15% per year between 1985 and 2005, while real rates were 3.5%. Its sell-side indicator, a contrarian sentiment guage that tracks sell-side strategists’ recommended equity allocations, stayed at a level in September that has historically preceded gains 95% of the time.

Source: Mint October 03, 2023 05:07 UTC