Reuters are reporting that analysts at RBC Capital Markets on Monday joined other brokerages in cutting their 2022 year-end S&P 500 target, trimming it by about 3.3% to 4,700 points, due to slowing economic growth.
They are joining an increasing number of bods on the street that are reigning in their overly buoyant forecasts from the start of the year
HSBC and Credit Suisse cut their targets on the benchmark index in May following a market selloff over fears of a prolonged war in Ukraine and record high oil prices that are hurting global economic recovery from COVID-19.
"We are continuing to bake in a slower economic growth backdrop in 2022-2023, but not a recession," RBC analyst Lori Calvasina said in a note. The brokerage previously expected the S&P 500 to end 2022 at 4,860 points.
However, RBC analysts said small-cap companies were faring better on its sentiment and valuation model, with their earnings looking better than others.
"If it turns out that the U.S. avoids a recession and the U.S. equity market has bottomed, we'll look back at SmallCap's resilience in early 2022 as something telling us stocks had already priced-in the economic damage that was around the corner."
There's nothing quite like price to change sentiment (and forecasts)
