The Wall Street indices turned green on Friday after a rough September. There’s still plenty that could argue a further move down, including China, supply chain constraints, inflation, and “Washington unknowns”, but Hightower’s Stephanie Link is convinced of better times ahead.
Link’s remarks on CNBC’s “Halftime Report”
Link expects supply chain issues to be “transitory”. On CNBC’s “Halftime Report”, she said:
I’m listening to what companies are saying. They’re saying demand is still very strong, it’s the supply side that’s hurting their businesses. They’ll figure that out.
Other reasons why Link is bullish on the market include GDP growth and savings rate, which stand at a solid 6.7% and 9.4%, respectively. On top of that, new orders for manufactured durable goods – a leading indicator for higher earnings forward – increased in August for the 15th consecutive month. Link added:
Yes, we have inflation and supply chain constraints. That’s why rates are going higher, and that usually favours the rotation back into value versus growth which we have been seeing over the last couple of weeks minus yesterday.
Cerity Partners’ Jim Lebenthal agrees
During the same interview, Cerity Partners’ Jim Lebenthal agreed with Link’s outlook. He said:
We’re talking about earnings for the quarter that ended September 30th. What was the big motive force for those three months? It was the delta variant. Guess what, the delta variant has peaked, numbers clearly show that.
He also quoted Merck’s news as another positive for the market as it could further push the world towards reopening. Lebenthal is confident that the U.S. Fed will remain accommodative for another eight months at least.
Also on Friday, Fundstrat’s Tom Lee said he still thought the benchmark S&P 500 index will close the year around 4,700.
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